Title: SAFE Banking Act of 2019
Policy area: Finance and Financial Sector

Summary:
Secure and Fair Enforcement Banking Act of 2019 or the SAFE Banking Act of 2019
This bill generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate marijuana-related business. Specifically, the bill prohibits a federal banking regulator from (1) terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate marijuana-related business; (2) prohibiting or otherwise discouraging a depository institution from offering financial services to such a business; (3) recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder solely because the account holder is affiliated with such a business; (4) taking any adverse or corrective supervisory action on a loan made to a person solely because the person either owns such a business or owns real estate or equipment leased or sold to such a business; or (5) penalizing a depository institution for engaging in a financial service for such a business.
As specified by the bill, a depository institution or a Federal Reserve bank shall not, under federal law, be liable or subject to forfeiture for providing a loan or other financial services to a legitimate marijuana-related business.
The Government Accountability Office must report on (1) access to financial services for minority-owned and women-owned marijuana-related businesses; and (2) the effectiveness of suspicious-transaction reports at finding engagement with organized criminal activity in jurisdictions that allow the cultivation, sale, or distribution of marijuana.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1200 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 1200

    To create protections for depository institutions that provide 
   financial services to cannabis-related legitimate businesses and 
     service providers for such businesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 11, 2019

 Mr. Merkley (for himself, Mr. Gardner, Ms. Rosen, Ms. Murkowski, Mr. 
   Bennet, Mr. Sullivan, Ms. Harris, Mr. Paul, Ms. Cortez Masto, Ms. 
   Duckworth, Mr. Peters, Mr. Menendez, Mr. King, Mr. Sanders, Mrs. 
 Murray, Mr. Markey, Mr. Leahy, Mr. Schatz, Mr. Wyden, Ms. Warren, Ms. 
 Hirono, and Mr. Cramer) introduced the following bill; which was read 
  twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
    To create protections for depository institutions that provide 
   financial services to cannabis-related legitimate businesses and 
     service providers for such businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; PURPOSE.

    (a) Short Title.--This Act may be cited as the ``Secure And Fair 
Enforcement Banking Act of 2019'' or the ``SAFE Banking Act of 2019''.
    (b) Purpose.--The purpose of this Act is to increase public safety 
by ensuring access to financial services to cannabis-related legitimate 
businesses and service providers and reducing the amount of cash at 
such businesses.

SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS.

    (a) In General.--A Federal banking regulator may not--
            (1) terminate or limit the deposit insurance or share 
        insurance of a depository institution under the Federal Deposit 
        Insurance Act (12 U.S.C. 1811 et seq.) or the Federal Credit 
        Union Act (12 U.S.C. 1751 et seq.) or take any other adverse 
        action against a depository institution under section 8 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1818) solely because 
        the depository institution provides or has provided financial 
        services to a cannabis-related legitimate business or service 
        provider;
            (2) prohibit, penalize, or otherwise discourage a 
        depository institution from providing financial services to a 
        cannabis-related legitimate business or service provider or to 
        a State, political subdivision of a State, or Indian Tribe that 
        exercises jurisdiction over cannabis-related legitimate 
        businesses;
            (3) recommend, incentivize, or encourage a depository 
        institution not to offer financial services to an account 
        holder, or to downgrade or cancel the financial services 
        offered to an account holder solely because--
                    (A) the account holder is a cannabis-related 
                legitimate business or service provider, or is an 
                employee, owner, or operator of a cannabis-related 
                legitimate business or service provider;
                    (B) the account holder later becomes an employee, 
                owner, or operator of a cannabis-related legitimate 
                business or service provider; or
                    (C) the depository institution was not aware that 
                the account holder is an employee, owner, or operator 
                of a cannabis-related legitimate business or service 
                provider;
            (4) take any adverse or corrective supervisory action on a 
        loan made to--
                    (A) a cannabis-related legitimate business or 
                service provider, solely because the business is a 
                cannabis-related legitimate business or service 
                provider;
                    (B) an employee, owner, or operator of a cannabis-
                related legitimate business or service provider, solely 
                because the employee, owner, or operator is employed 
                by, owns, or operates a cannabis-related legitimate 
                business or service provider, as applicable; or
                    (C) an owner or operator of real estate or 
                equipment that is leased to a cannabis-related 
                legitimate business or service provider, solely because 
                the owner or operator of the real estate or equipment 
                leased the equipment or real estate to a cannabis-
                related legitimate business or service provider, as 
                applicable; or
            (5) prohibit or penalize a depository institution (or 
        entity performing a financial service for or in association 
        with a depository institution) for, or otherwise discourage a 
        depository institution (or entity performing a financial 
        service for or in association with a depository institution) 
        from, engaging in a financial service for a cannabis-related 
        legitimate business or service provider.
    (b) Safe Harbor Applicable to De Novo Institutions.--Subsection (a) 
shall apply to an institution applying for a depository institution 
charter to the same extent as such subsection applies to a depository 
institution.

SEC. 3. PROTECTIONS FOR ANCILLARY BUSINESSES.

    For purposes of sections 1956 and 1957 of title 18, United States 
Code, and all other provisions of Federal law, the proceeds from a 
transaction conducted by a cannabis-related legitimate business or 
service provider shall not be considered as proceeds from an unlawful 
activity solely because the transaction was conducted by a cannabis-
related legitimate business or service provider, as applicable.

SEC. 4. PROTECTIONS UNDER FEDERAL LAW.

    (a) In General.--With respect to providing a financial service to a 
cannabis-related legitimate business or service provider within a 
State, political subdivision of a State, or Indian country that allows 
the cultivation, production, manufacture, sale, transportation, 
display, dispensing, distribution, or purchase of cannabis pursuant to 
a law or regulation of such State, political subdivision, or Indian 
Tribe that has jurisdiction over the Indian country, as applicable, a 
depository institution, entity performing a financial service for or in 
association with a depository institution, or insurer that provides a 
financial service to a cannabis-related legitimate business or service 
provider, and the officers, directors, and employees of that depository 
institution, entity, or insurer may not be held liable pursuant to any 
Federal law or regulation--
            (1) solely for providing such a financial service; or
            (2) for further investing any income derived from such a 
        financial service.
    (b) Protections for Federal Reserve Banks.--With respect to 
providing a service to a depository institution that provides a 
financial service to a cannabis-related legitimate business or service 
provider (where such financial service is provided within a State, 
political subdivision of a State, or Indian country that allows the 
cultivation, production, manufacture, sale, transportation, display, 
dispensing, distribution, or purchase of cannabis pursuant to a law or 
regulation of such State, political subdivision, or Indian Tribe that 
has jurisdiction over the Indian country, as applicable), a Federal 
reserve bank, and the officers, directors, and employees of the Federal 
reserve bank, may not be held liable pursuant to any Federal law or 
regulation--
            (1) solely for providing such a service; or
            (2) for further investing any income derived from such a 
        service.
    (c) Forfeiture.--
            (1) Depository institutions.--A depository institution that 
        has a legal interest in the collateral for a loan or another 
        financial service provided to an owner, employee, or operator 
        of a cannabis-related legitimate business or service provider, 
        or to an owner or operator of real estate or equipment that is 
        leased or sold to a cannabis-related legitimate business or 
        service provider, shall not be subject to criminal, civil, or 
        administrative forfeiture of that legal interest pursuant to 
        any Federal law for providing such loan or other financial 
        service.
            (2) Federal reserve banks.--A Federal reserve bank that has 
        a legal interest in the collateral for a loan or another 
        financial service provided to an owner, employee, or operator 
        of a depository institution that provides a financial services 
        to a cannabis-related legitimate business or service provider, 
        or to an owner or operator of real estate or equipment that is 
        leased or sold to such a depository institution, shall not be 
        subject to criminal, civil, or administrative forfeiture of 
        that legal interest pursuant to any Federal law for providing 
        such loan or other financial service.

SEC. 5. RULE OF CONSTRUCTION.

    Nothing in this Act shall require a depository institution, entity 
performing a financial service for or in association with a depository 
institution, or insurer to provide financial services to a cannabis-
related legitimate business or service provider.

SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY REPORTS.

    Section 5318(g) of title 31, United States Code, is amended by 
adding at the end the following:
            ``(5) Requirements for cannabis-related legitimate 
        businesses.--
                    ``(A) In general.--With respect to a financial 
                institution or any director, officer, employee, or 
                agent of a financial institution that reports a 
                suspicious transaction pursuant to this subsection, if 
                the reason for the report relates to a cannabis-related 
                legitimate business or service provider, the report 
                shall comply with appropriate guidance issued by the 
                Financial Crimes Enforcement Network. The Secretary 
                shall ensure that the guidance is consistent with the 
                purpose and intent of the SAFE Banking Act of 2019 and 
                does not significantly inhibit the provision of 
                financial services to a cannabis-related legitimate 
                business or service provider in a State, political 
                subdivision of a State, or Indian country that has 
                allowed the cultivation, production, manufacture, 
                transportation, display, dispensing, distribution, 
                sale, or purchase of cannabis pursuant to law or 
                regulation of such State, political subdivision, or 
                Indian Tribe that has jurisdiction over the Indian 
                country.
                    ``(B) Definitions.--For purposes of this paragraph:
                            ``(i) Cannabis.--The term `cannabis' has 
                        the meaning given the term `marihuana' in 
                        section 102 of the Controlled Substances Act 
                        (21 U.S.C. 802).
                            ``(ii) Cannabis-related legitimate 
                        business.--The term `cannabis-related 
                        legitimate business' has the meaning given that 
                        term in section 11 of the SAFE Banking Act of 
                        2019.
                            ``(iii) Indian country.--The term `Indian 
                        country' has the meaning given that term in 
                        section 1151 of title 18.
                            ``(iv) Indian tribe.--The term `Indian 
                        Tribe' has the meaning given that term in 
                        section 102 of the Federally Recognized Indian 
                        Tribe List Act of 1994 (25 U.S.C. 479a).
                            ``(v) Financial service.--The term 
                        `financial service' has the meaning given that 
                        term in section 11 of the SAFE Banking Act of 
                        2019.
                            ``(vi) Service provider.--The term `service 
                        provider' has the meaning given that term in 
                        section 11 of the SAFE Banking Act of 2019.
                            ``(vii) State.--The term `State' means each 
                        of the several States, the District of 
                        Columbia, Puerto Rico, and any territory or 
                        possession of the United States.''.

SEC. 7. GUIDANCE AND EXAMINATION PROCEDURES.

    Not later than 180 days after the date of enactment of this Act, 
the Financial Institutions Examination Council shall develop uniform 
guidance and examination procedures for depository institutions that 
provide financial services to cannabis-related legitimate businesses 
and service providers.

SEC. 8. ANNUAL DIVERSITY AND INCLUSION REPORT.

    The Federal banking regulators shall issue an annual report to 
Congress containing--
            (1) information and data on the availability of access to 
        financial services for minority-owned and women-owned cannabis-
        related legitimate businesses; and
            (2) any regulatory or legislative recommendations for 
        expanding access to financial services for minority-owned and 
        women-owned cannabis-related legitimate businesses.

SEC. 9. GAO STUDY ON DIVERSITY AND INCLUSION.

    (a) Study.--The Comptroller General of the United States shall 
carry out a study on the barriers to marketplace entry, including in 
the licensing process, and the access to financial services for 
potential and existing minority-owned and women-owned cannabis-related 
legitimate businesses.
    (b) Report.--The Comptroller General shall issue a report to the 
Congress--
            (1) containing all findings and determinations made in 
        carrying out the study required under subsection (a); and
            (2) containing any regulatory or legislative 
        recommendations for removing barriers to marketplace entry, 
        including in the licensing process, and expanding access to 
        financial services for potential and existing minority-owned 
        and women-owned cannabis-related legitimate businesses.

SEC. 10. GAO STUDY ON EFFECTIVENESS OF CERTAIN REPORTS ON FINDING 
              CERTAIN PERSONS.

    Not later than 2 years after the date of the enactment of this Act, 
the Comptroller General of the United States shall carry out a study on 
the effectiveness of reports on suspicious transactions filed pursuant 
to section 5318(g) of title 31, United States Code, at finding 
individuals or organizations suspected or known to be engaged with 
transnational criminal organizations and whether any such engagement 
exists in a State, political subdivision, or Indian Tribe that has 
jurisdiction over Indian country that allows the cultivation, 
production, manufacture, sale, transportation, display, dispensing, 
distribution, or purchase of cannabis. The study shall examine reports 
on suspicious transactions as follows:
            (1) During the period of 2014 until the date of the 
        enactment of this Act, reports relating to marijuana-related 
        businesses.
            (2) During the 1-year period after date of the enactment of 
        this Act, reports relating to cannabis-related legitimate 
        businesses.

SEC. 11. DEFINITIONS.

    In this Act:
            (1) Business of insurance.--The term ``business of 
        insurance'' has the meaning given such term in section 1002 of 
        the Dodd-Frank Wall Street Reform and Consumer Protection Act 
        (12 U.S.C. 5481).
            (2) Cannabis.--The term ``cannabis'' has the meaning given 
        the term ``marihuana'' in section 102 of the Controlled 
        Substances Act (21 U.S.C. 802).
            (3) Cannabis product.--The term ``cannabis product'' means 
        any article which contains cannabis, including an article which 
        is a concentrate, an edible, a tincture, a cannabis-infused 
        product, or a topical.
            (4) Cannabis-related legitimate business.--The term 
        ``cannabis-related legitimate business'' means a manufacturer, 
        producer, or any person or company that--
                    (A) engages in any activity described in 
                subparagraph (B) pursuant to a law established by a 
                State or a political subdivision of a State, as 
                determined by such State or political subdivision; and
                    (B) participates in any business or organized 
                activity that involves handling cannabis or cannabis 
                products, including cultivating, producing, 
                manufacturing, selling, transporting, displaying, 
                dispensing, distributing, or purchasing cannabis or 
                cannabis products.
            (5) Depository institution.--The term ``depository 
        institution'' means--
                    (A) a depository institution as defined in section 
                3(c) of the Federal Deposit Insurance Act (12 U.S.C. 
                1813(c));
                    (B) a Federal credit union as defined in section 
                101 of the Federal Credit Union Act (12 U.S.C. 1752); 
                or
                    (C) a State credit union as defined in section 101 
                of the Federal Credit Union Act (12 U.S.C. 1752).
            (6) Federal banking regulator.--The term ``Federal banking 
        regulator'' means each of the Board of Governors of the Federal 
        Reserve System, the Bureau of Consumer Financial Protection, 
        the Federal Deposit Insurance Corporation, the Financial Crimes 
        Enforcement Network, the Office of Foreign Asset Control, the 
        Office of the Comptroller of the Currency, the National Credit 
        Union Administration, the Department of the Treasury, or any 
        Federal agency or department that regulates banking or 
        financial services, as determined by the Secretary of the 
        Treasury.
            (7) Financial service.--The term ``financial service''--
                    (A) means a financial product or service, as 
                defined in section 1002 of the Dodd-Frank Wall Street 
                Reform and Consumer Protection Act (12 U.S.C. 5481);
                    (B) includes the business of insurance;
                    (C) includes, whether performed directly or 
                indirectly, the authorizing, processing, clearing, 
                settling, billing, transferring for deposit, 
                transmitting, delivering, instructing to be delivered, 
                reconciling, collecting, or otherwise effectuating or 
                facilitating of payments or funds, where such payments 
                or funds are made or transferred by any means, 
                including by the use of credit cards, debit cards, 
                other payment cards, or other access devices, accounts, 
                original or substitute checks, or electronic funds 
                transfers;
                    (D) includes acting as a money transmitting 
                business which directly or indirectly makes use of a 
                depository institution in connection with effectuating 
                or facilitating a payment for a cannabis-related 
                legitimate business or service provider in compliance 
                with section 5330 of title 31, United States Code, and 
                any applicable State law; and
                    (E) includes acting as an armored car service for 
                processing and depositing with a depository institution 
                or the Board of Governors of the Federal Reserve System 
                with respect to any monetary instruments (as defined 
                under section 1956(c)(5) of title 18, United States 
                Code).
            (8) Indian country.--The term ``Indian country'' has the 
        meaning given that term in section 1151 of title 18.
            (9) Indian tribe.--The term ``Indian Tribe'' has the 
        meaning given that term in section 102 of the Federally 
        Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a).
            (10) Insurer.--The term ``insurer'' has the meaning given 
        that term under section 313(r) of title 31, United States Code.
            (11) Manufacturer.--The term ``manufacturer'' means a 
        person who manufactures, compounds, converts, processes, 
        prepares, or packages cannabis or cannabis products.
            (12) Producer.--The term ``producer'' means a person who 
        plants, cultivates, harvests, or in any way facilitates the 
        natural growth of cannabis.
            (13) Service provider.--The term ``service provider''--
                    (A) means a business, organization, or other person 
                that--
                            (i) sells goods or services to a cannabis-
                        related legitimate business; or
                            (ii) provides any business services, 
                        including the sale or lease of real or any 
                        other property, legal or other licensed 
                        services, or any other ancillary service, 
                        relating to cannabis; and
                    (B) does not include a business, organization, or 
                other person that participates in any business or 
                organized activity that involves handling cannabis or 
                cannabis products, including cultivating, producing, 
                manufacturing, selling, transporting, displaying, 
                dispensing, distributing, or purchasing cannabis or 
                cannabis products.
            (14) State.--The term ``State'' means each of the several 
        States, the District of Columbia, Puerto Rico, and any 
        territory or possession of the United States.
                                 <all>