G:\M\16\PERLMU\PERLMU_009.XML [∼115H2215] [DISCUSSION DRAFT] H. R. ll 116TH CONGRESS 1ST SESSION To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses, and for other purposes. IN THE HOUSE OF REPRESENTATIVES Mr. PERLMUTTER (for himself, Mr. HECK, Mr. STIVERS, and Mr. DAVIDSON of Ohio) introduced the following bill; which was referred to the Committee on lllllllllllllll A BILL To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 4 SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Secure And Fair En- 5 forcement Banking Act of 2019’’ or the ‘‘SAFE Banking 6 Act of 2019’’. 7 8 SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS. A Federal banking regulator may not— g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 2 1 (1) terminate or limit the deposit insur- 2 ance or share insurance of a depository institu- 3 tion under the Federal Deposit Insurance Act 4 (12 U.S.C. 1811 et seq.) or the Federal Credit 5 Union Act (12 U.S.C. 1751 et seq.) solely be- 6 cause the depository institution provides or has 7 provided financial services to a cannabis-related 8 legitimate business; 9 (2) prohibit, penalize, or otherwise discour- 10 age a depository institution from providing fi- 11 nancial services to a cannabis-related legitimate 12 business or to a State, political subdivision of a 13 State, or Indian Tribe that exercises jurisdic- 14 tion over cannabis-related legitimate businesses; 15 (3) recommend, incentivize, or encourage a 16 depository institution not to offer financial serv- 17 ices to an account holder, or to downgrade or 18 cancel the financial services offered to an ac- 19 count holder solely because— 20 (A) the account holder is a manufac- 21 turer or producer, or is the owner, oper- 22 ator, or employee of a cannabis-related le- 23 gitimate business; g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 3 1 (B) the account holder later becomes 2 an owner or operator of a cannabis-related 3 legitimate business; or 4 (C) the depository institution was not 5 aware that the account holder is the owner 6 or operator of a cannabis-related legitimate 7 business; and 8 (4) take any adverse or corrective super- 9 visory action on a loan made to an owner or op- 10 erator of— 11 (A) a cannabis-related legitimate busi- 12 ness, solely because the owner or operator 13 owns or operates a cannabis-related legiti- 14 mate business; or 15 (B) real estate or equipment that is 16 leased to a cannabis-related legitimate 17 business, solely because the owner or oper- 18 ator of the real estate or equipment leased 19 the equipment or real estate to a cannabis- 20 related legitimate business. 21 SEC. 3. TREATMENT OF PROCEEDS UNDER FEDERAL LAW. 22 For purposes sections 1956 and 1957 of title 18, 23 United States Code, and all other provisions of Federal 24 law, the proceeds from a transaction conducted by a can25 nabis-related legitimate business shall not be considered g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 4 1 as proceeds from an unlawful activity solely because the 2 transaction was conducted by a cannabis-related legiti3 mate business. 4 5 SEC. 4. PROTECTIONS UNDER FEDERAL LAW. (a) IN GENERAL.—In a State, political subdivision of 6 a State, or Indian country that allows the cultivation, pro7 duction, manufacture, sale, transportation, display, dis8 pensing, distribution, or purchase of cannabis pursuant to 9 a law or regulation of such State, political subdivision, or 10 Indian Tribe that has jurisdiction over the Indian country, 11 as applicable, a depository institution that provides finan12 cial services to a cannabis-related legitimate business, and 13 the officers, directors, and employees of that depository 14 institution may not be held liable pursuant to any Federal 15 law or regulation— 16 (1) solely for providing such financial services 17 pursuant to the law or regulation of such State, po- 18 litical subdivision, or Indian Tribe; or 19 (2) for further investing any income derived 20 from such financial services. 21 (b) FORFEITURE.—A depository institution that has 22 a legal interest in the collateral for a loan or another fi23 nancial service provided to an owner or operator of a can24 nabis-related legitimate business, or to an owner or oper25 ator of real estate or equipment that is leased or sold to g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 5 1 a cannabis-related legitimate business, shall not be subject 2 to criminal, civil, or administrative forfeiture of that legal 3 interest pursuant to any Federal law for providing such 4 loan or other financial service. 5 6 SEC. 5. RULE OF CONSTRUCTION. Nothing in this Act shall require a depository institu- 7 tion to provide financial services to a cannabis-related le8 gitimate business. 9 SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY 10 11 REPORTS. Section 5318(g) of title 31, United States Code, is 12 amended by adding at the end the following: 13 ‘‘(5) REQUIREMENTS 14 LEGITIMATE BUSINESSES.— 15 ‘‘(A) IN GENERAL.—With respect to a fi- 16 nancial institution or any director, officer, em- 17 ployee, or agent of a financial institution that 18 reports a suspicious transaction pursuant to 19 this subsection, if the reason for the report re- 20 lates to a cannabis-related legitimate business, 21 the report shall comply with appropriate guid- 22 ance issued by the Financial Crimes Enforce- 23 ment Network. The Secretary shall ensure that 24 the guidance is consistent with the purpose and 25 intent of the SAFE Banking Act of 2019 and g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 FOR CANNABIS-RELATED 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 6 1 does not inhibit the provision of financial serv- 2 ices to a cannabis-related legitimate business in 3 a State, political subdivision of a State, or In- 4 dian country that has allowed the cultivation, 5 production, manufacture, transportation, dis- 6 play, dispensing, distribution, sale, or purchase 7 of cannabis pursuant to law or regulation of 8 such State, political subdivision, or Indian 9 Tribe that has jurisdiction over the Indian 10 country. 11 ‘‘(B) DEFINITIONS.—For purposes of this 12 paragraph: 13 ‘‘(i) CANNABIS.—The term ‘cannabis’ 14 has the meaning given the term ‘mari- 15 huana’ in section 102 of the Controlled 16 Substances Act (21 U.S.C. 802). 17 ‘‘(ii) CANNABIS-RELATED 18 BUSINESS.—The 19 related legitimate business’ has the mean- 20 ing given that term in section 8of the 21 SAFE Banking Act of 2019. 22 term he term ‘cannabis- ‘‘(iii) INDIAN COUNTRY.—The term 23 ‘Indian country’ has the meaning given 24 that term in section 1151 of title 18. g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 LEGITIMATE 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 7 1 ‘‘(iv) INDIAN TRIBE.—The term ‘In- 2 dian Tribe’ has the meaning given that 3 term in section 102 of the Federally Rec- 4 ognized Indian Tribe List Act of 1994 (25 5 U.S.C. 479a). 6 ‘‘(v) FINANCIAL SERVICE.—The term 7 ‘financial service’ means a financial prod- 8 uct or service as defined in section 1002 of 9 the Dodd-Frank Wall Street Reform and 10 Consumer 11 5481).’’. 12 13 Protection Act (12 U.S.C. SEC. 7. GUIDANCE AND EXAMINATION PROCEDURES. (a) IN GENERAL.—Not later than 180 days after the 14 date of enactment of this Act, the Financial Institutions 15 Examination Council shall develop uniform guidance and 16 examination procedures for depository institutions that 17 provide financial services to cannabis-related legitimate 18 businesses. 19 20 (b) ISSUANCE LATORS.—The BY FEDERAL BANKING REGU- Federal banking regulators shall each issue 21 guidance and examination procedures for depository insti22 tutions that provide financial services to cannabis-related 23 legitimate businesses that are consistent with the uniform 24 guidance and examination procedures developed under 25 subsection (a). g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 8 1 SEC. 8. DEFINITIONS. 2 In this Act: 3 (1) CANNABIS.—The term ‘‘cannabis’’ has the 4 meaning given the term ‘‘marihuana’’ in section 102 5 of the Controlled Substances Act (21 U.S.C. 802). 6 (2) CANNABIS term ‘‘cannabis 7 product’’ means any article which contains cannabis, 8 including an article which is a concentrate, an edi- 9 ble, a tincture, a cannabis-infused product, or a top- 10 ical. 11 (3) 12 NESS.—The 13 ness’’ means a manufacturer, producer, or any per- 14 son or company that— CANNABIS-RELATED LEGITIMATE BUSI- term ‘‘cannabis-related legitimate busi- 15 (A) engages in any activity described in 16 subparagraph (B) pursuant to a law established 17 by a State or a political subdivision of a State; 18 and 19 (B)(i) participates in any business or orga- 20 nized activity that involves handling cannabis or 21 cannabis products, including cultivating, pro- 22 ducing, manufacturing, selling, transporting, 23 displaying, dispensing, distributing, or pur- 24 chasing cannabis or cannabis products or dis- 25 tributing or deriving any proceeds, directly or g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 PRODUCT.—The 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 9 1 indirectly, from cannabis or cannabis products; 2 or 3 (ii) provides— 4 (I) any financial service, including re- 5 tirement plans or exchange traded funds, 6 relating to cannabis; or 7 (II) any business services, including 8 the sale or lease of real or any other prop- 9 erty, legal or other licensed services, or any 10 other ancillary service, relating to can- 11 nabis. 12 (4) DEPOSITORY 13 term ‘‘de- pository institution’’ means— 14 (A) a depository institution as defined in 15 section 3(c) of the Federal Deposit Insurance 16 Act (12 U.S.C. 1813(c)); 17 (B) a Federal credit union as defined in 18 section 101 of the Federal Credit Union Act 19 (12 U.S.C. 1752); or 20 (C) a State credit union as defined in sec- 21 tion 101 of the Federal Credit Union Act (12 22 U.S.C. 1752). 23 (5) FEDERAL BANKING REGULATOR.—The 24 term ‘‘Federal banking regulator’’ means each of the 25 Board of Governors of the Federal Reserve System, g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 INSTITUTION.—The 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 10 1 the Bureau of Consumer Financial Protection, the 2 Federal Deposit Insurance Corporation, the Office of 3 the Comptroller of the Currency, the National Credit 4 Union Administration, or any Federal agency or de- 5 partment that regulates banking or financial serv- 6 ices, as determined by the Secretary of the Treas- 7 ury. 8 (6) FINANCIAL term ‘‘financial 9 service’’ means a financial product or service as de- 10 fined in section 1002 of the Dodd-Frank Wall Street 11 Reform and Consumer Protection Act (12 U.S.C. 12 5481). 13 (7) INDIAN COUNTRY.—The term ‘‘Indian coun- 14 try’’ has the meaning given that term in section 15 1151 of title 18. 16 (8) INDIAN TRIBE.—The term ‘‘Indian Tribe’’ 17 has the meaning given that term in section 102 of 18 the Federally Recognized Indian Tribe List Act of 19 1994 (25 U.S.C. 479a). 20 (9) MANUFACTURER.—The term ‘‘manufac- 21 turer’’ means a person who manufactures, com- 22 pounds, converts, processes, prepares, or packages 23 cannabis or cannabis products. g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 SERVICE.—The 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1. G:\M\16\PERLMU\PERLMU_009.XML 11 1 (10) PRODUCER.—The term ‘‘producer’’ means 2 a person who plants, cultivates, harvests, or in any 3 way facilitates the natural growth of cannabis. 4 (11) STATE.—The term ‘‘State’’ means each of 5 the several States, the District of Columbia, Puerto 6 Rico, and any territory or possession of the United 7 States. g:\VHLC\020719\020719.155.xml February 7, 2019 (2:06 p.m.) VerDate 0ct 09 2002 14:06 Feb 07, 2019 Jkt 000000 (715621 5) PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 C:\USERS\MWBARK~1\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\PERLMU~1.