Illinois General Assembly - Full Text of HB2403
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Full Text of HB2403  102nd General Assembly

HB2403 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB2403

 

Introduced 2/17/2021, by Rep. Kambium Buckner

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Cannabis Banking and Credit Union Act. Establishes a procedure to license financial institutions to provide banking services to cannabis businesses. Sets forth provisions concerning an advisory board, application and licensure, authorizations, deposit insurance, banking services, prohibited practices, and operative conditions. Effective immediately.


LRB102 12537 BMS 17875 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2403LRB102 12537 BMS 17875 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Cannabis Banking and Credit Union Act.
 
6    Section 5. Definitions. In this Act:
7    "Applicant" means a person or entity that submits an
8application to be licensed by the State to provide banking
9services to a cannabis business.
10    "Banking services" means the provision of depository
11services with respect to cash or other funds and the issuance
12and acceptance of special purpose checks, including the
13acceptance and maintenance of deposit proceeds, consistent
14with the requirements and limitations provided by this Act.
15    "Board" means the Cannabis Banking and Credit Union
16Advisory Board.
17    "Cannabis business" means a person or entity registered or
18licensed to engage in commercial cannabis activity under the
19Compassionate Use of Medical Cannabis Program Act or the
20Cannabis Regulation and Tax Act. The term "cannabis business"
21also includes an ancillary business or profession that serves
22a person or entity registered or licensed to engage in
23commercial cannabis activity.

 

 

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1    "Cannabis limited charter bank or credit union" means a
2person or entity that receives a license following the
3approval of an application pursuant to this Act.
4    "Department" means the Department of Financial and
5Professional Regulation.
6    "Licensee" means a cannabis limited charter bank or credit
7union.
8    "Secretary" means the Secretary of Financial and
9Professional Regulation.
 
10    Section 10. Cannabis Banking and Credit Union Advisory
11Board.
12    (a) The Cannabis Banking and Credit Union Advisory Board
13is created. The Board shall be comprised of the State
14Treasurer, the State Comptroller, and the Secretary of
15Financial and Professional Regulation. The Director of the
16Governor's Office of Management and Budget shall serve as an
17ex officio, nonvoting member. Board members may not be
18compensated for their services.
19    (b) The Board shall be generally responsible for ensuring
20that this Act provides a safe and efficient way to pay State
21and local taxes and fees, to pay rent associated with the
22account holder's cannabis business, to issue special purpose
23checks, and to legally invest in this State's economy, while
24reducing the burdens placed on local government that result
25from collecting and managing large sums of cash.

 

 

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1    (c) The Department shall submit reports of enforcement
2activities to the Board for review annually or as the Board may
3require. The Board shall meet once a year or more often as
4needed at the Board's discretion to review enforcement
5activity reports from the Department. These meetings shall be
6noticed and open to public comment. The Board shall evaluate
7the reports and the comments of the public and draft
8recommended actions to be taken legislatively or
9administratively, which shall be submitted to the General
10Assembly, as provided in Section 3.1 of the General Assembly
11Organization Act, and the Governor.
12    (d) The Board shall provide guidance and education to
13registered broker-dealers and licensed investment advisors on
14how to accommodate account holders of a cannabis limited
15charter bank or credit union in purchasing, holding, and
16selling any of the investments described in Section 25.
 
17    Section 15. Licensing.
18    (a) A person or entity may act as a cannabis limited
19charter bank or credit union after obtaining a license
20pursuant to this Act.
21    (b) A cannabis limited charter bank or credit union
22license is not transferable or assignable.
23    (c) A licensee shall comply with all requirements of the
24Illinois Banking Act or the Illinois Credit Union Act, as
25applicable, except to the extent that any requirement of those

 

 

HB2403- 4 -LRB102 12537 BMS 17875 b

1laws are inconsistent with a provision of this Act, in which
2case the provisions of this Act shall prevail.
3    (d) A cannabis limited charter bank or credit union shall
4adopt policies and practices that allow it to comply with the
5principles and policies found in the federal Bank Secrecy Act
6(31 U.S.C. 5311) and to cooperate with the federal Financial
7Crimes Enforcement Network.
8    (e) The Department shall adopt rules to implement this
9Act.
 
10    Section 20. Application.
11    (a) An applicant to be licensed as a cannabis limited
12charter bank or credit union shall submit a completed
13application to the Department in a form prescribed by the
14Secretary that satisfies the requirements of this Section.
15    (b) An applicant shall elect to form under either the
16Illinois Banking Act or the Illinois Credit Union Act and
17shall comply with all requirements imposed by those laws, as
18applicable, except to the extent that any requirement of those
19laws is inconsistent with the provisions of this Act.
20    (c) The name of a cannabis limited charter bank shall
21include "cannabis limited charter bank" or the abbreviation
22"C.L.C.B." or "CLCB". The name of a cannabis limited credit
23union shall include "cannabis credit union" or the
24abbreviation "C.C.U." or "CCU".
25    (d) The Department may charge the applicant a reasonable

 

 

HB2403- 5 -LRB102 12537 BMS 17875 b

1fee for a cannabis limited charter bank or credit union
2license, not to exceed the costs of regulation.
 
3    Section 25. Authorizations.
4    (a) A cannabis limited charter bank or credit union may
5issue to an account holder special purpose checks that are
6valid only for the purposes specified in subsection (b). The
7following text shall be printed on each check in at least
812-point type, with the name of the issuing financial
9institution included: "This check is issued by [insert name of
10financial institution] and may only be deposited or cashed at
11this cannabis limited charter bank or credit union or another
12cannabis limited charter bank or credit union that agrees to
13accept this check.".
14    (b) Subject to the limitations of subsection (d), a
15special purpose check issued by a cannabis limited charter
16bank or credit union may be used only for the following
17purposes:
18        (1) To pay fees or taxes to the State or a local
19    jurisdiction.
20        (2) To pay rent on property that is leased by, or on
21    behalf of, the account holder's cannabis business.
22        (3) To pay a vendor that is physically located in this
23    State for expenses related to goods or services associated
24    with the account holder's cannabis business.
25        (4) To purchase the following:

 

 

HB2403- 6 -LRB102 12537 BMS 17875 b

1            (A) Bonds, interest-bearing notes, or
2        interest-bearing warrants of this State for which the
3        faith and credit of this State are pledged for the
4        payment of principal and interest.
5            (B) Bonds or warrants, including, but not limited
6        to, revenue warrants, of any unit of local government
7        or school district of this State.
8    (c) Subject to the limitations of subsection (d), State
9and local government offices are authorized to accept a
10special purpose check issued by a cannabis limited charter
11bank or credit union.
12    (d) An individual or entity, private or public, is not
13required to accept a special purpose check issued by a
14cannabis limited charter bank or credit union pursuant to this
15Section.
16    (e) A cannabis limited charter bank or credit union is
17authorized to cash a special purpose check presented to it by a
18person or entity that is not an account holder if that cannabis
19limited charter bank or credit union previously issued that
20special purpose check to an account holder and the check was
21used for one of the authorized purposes specified in
22subsection (b).
 
23    Section 30. Deposit insurance. A cannabis limited charter
24bank or credit union shall obtain and maintain deposit
25insurance, in an amount acceptable to the Secretary, for the

 

 

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1cannabis depository institution and its assets at all times
2while it is engaged in banking services. Private insurance
3shall be satisfactory to the Secretary. In seeking and
4retaining deposit insurance, a cannabis limited charter bank
5or credit union may do all things and assume and discharge all
6obligations required of it that are not in conflict with State
7law.
 
8    Section 35. Banking services.
9    (a) A cannabis limited charter bank or credit union may
10enter into an agreement with one or more other licensees in
11order to form a banking network. That agreement shall be
12subject to the approval of the Secretary. The network shall be
13for the purpose of assisting each other in providing services
14to cannabis businesses and each other. A network of this type
15shall not include any financial institution that is not a
16licensee under this Act.
17    (b) A cannabis limited charter bank or credit union may
18provide accounts to people and entities other than cannabis
19businesses pursuant to rules adopted by the Secretary.
20    (c) A cannabis limited charter bank or credit union may
21charge fees for the banking services that it provides. Each
22cannabis limited charter bank and credit union that charges
23fees shall conspicuously post on its Internet website the
24types of fees and the amount of fees it charges for its
25services, in a format intended to provide transparency.
 

 

 

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1    Section 40. Prohibited practices.
2    (a) A cannabis limited charter bank or credit union may
3not engage in banking activity with any other financial
4institution that lacks a license issued under this Act.
5    (b) Except as otherwise provided in Section 45, only a
6cannabis limited charter bank may merge with one or more
7cannabis limited charter banks. The provisions of the Illinois
8Banking Act applicable to mergers between banks shall apply,
9subject to the limitations in this Section.
10    (c) Except as otherwise provided in Section 45, only a
11cannabis limited credit union may merge with one or more
12cannabis limited credit unions. Section 63 of the Illinois
13Credit Union Act shall apply, subject to the limitations in
14this Section.
15    (d) Except as otherwise provided in Section 45, a cannabis
16limited charter bank or credit union shall not be eligible to
17convert to a federal bank or federal credit union or to another
18type of business entity.
 
19    Section 45. Operative conditions.
20    (a) This Act shall become inoperative if either of the
21following occurs, whichever occurs first:
22        (1) The federal government, by legislative or
23    executive action, removes cannabis and cannabis-related
24    substances from the schedule of controlled substances, as

 

 

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1    defined in the federal Controlled Substances Act (21
2    U.S.C. 812, 21 CFR 1308).
3        (2) The federal government enacts legislation that
4    established protections for depository institutions that
5    provide financial services to cannabis-related legitimate
6    businesses.
7    (b) Within 30 days after the occurrence of either event
8set forth in subsection (a), the Department shall do both of
9the following:
10        (1) Post notice of that occurrence on the homepage of
11    its Internet website and send notice to both the Secretary
12    of State and the Legislative Reference Bureau. The notice
13    shall specify the date that this Act shall become
14    inoperative, which shall be one calendar year following
15    the effective date of the events specified in subsection
16    (a).
17        (2) Provide guidance for the orderly resolution of all
18    cannabis limited charter banks or credit unions licensed
19    pursuant to this Act. The resolution may involve, but is
20    not limited to:
21            (A) the voluntary liquidation of a cannabis
22        limited charter bank pursuant to the Illinois Banking
23        Act;
24            (B) the sale, merger, or conversion of a cannabis
25        limited charter bank pursuant to the Illinois Banking
26        Act; or

 

 

HB2403- 10 -LRB102 12537 BMS 17875 b

1            (C) the merger, dissolution, or conversion of a
2        cannabis limited credit union pursuant to the Illinois
3        Credit Union Act.
4    (c) A cannabis limited charter bank or credit union shall
5have one calendar year to orderly resolve in a manner
6acceptable to applicable State and federal regulators.
7    (d) Notwithstanding subsection (c), a cannabis limited
8charter bank or credit union shall comply with all applicable
9State laws regarding filings with the Secretary of State.
10    (e) If a cannabis limited charter bank or credit union
11fails in good faith to comply with subsection (c), the
12Department may take any action under this Act it deems
13necessary, including signing documents on behalf of the
14cannabis limited charter bank or credit union, to carry out
15the purposes of this Section.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.