SAFE Banking Act would provide safe harbor for financial institutions who work with the legal cannabis industry; suggested amendments would protect new banks and insurers, study impact on diversity

WASHINGTON, D.C. – On Thursday morning, the House Financial Services Committee approved an updated version of the Secure and Fair Enforcement (SAFE) Banking Act, which would provide safe harbor and guidance to financial institutions that wish to work with legal cannabis businesses, in a vote of 45-15. This is the first markup and committee approval of a cannabis-related bill in this congressional session. The legislation will now go back to the House for further consideration.

Suggested amendments include a mandate for the Government Accountability Office to study the impact of the bill on access to financial services and the cannabis industry for women and people of color, as well as extending protections to insurers and new financial institutions as they form.

“The SAFE Banking Act would go a long way toward improving safety, transparency, access, and justice in the cannabis industry,” said Aaron Smith, executive director of the National Cannabis Industry Association. “The amendments agreed upon in committee should solidify the already overwhelming support for this legislation in the House. The cannabis and financial services industries have been waiting for clarification and protection for far too long, and we are confident the House would approve this bill if allowed to vote on it without further delay.”

The bill was originally introduced by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH). It currently has 152 congressional cosponsors, more than any cannabis reform legislation.

The SAFE Banking Act would prevent federal banking regulators from punishing banks for working with cannabis related businesses that are obeying state laws or halting their services, taking action on loans made to those businesses, or limiting a depository institution’s access to the Deposit Insurance Fund. The bill would also protect ancillary businesses that work with the cannabis industry from being charged with money laundering and other financial crimes, and requires the Financial Institution Examination Council to develop guidance to help credit unions and banks understand how to lawfully serve cannabis businesses.

On Monday, the American Bankers Association and the Credit Union National Association sent a letter to Congress urging lawmakers to support the SAFE Banking Act, and an article published in the Wall Street Journal on Tuesday explored the wide variety of businesses that support cannabis banking reform.

Cannabis is legal for adults in ten states and the District of Columbia, and 33 states as well as several territories have comprehensive medical cannabis laws. The substance is legal in some form in 47 states, and dozens of states are considering cannabis policy reform legislation this year.