SAFE Banking Act would provide safe harbor for banks and lenders to work with state-legal cannabis businesses to address public safety, transparency, and access to capital
** Press conference THURSDAY at House Triangle at 2:30p with lawmakers and advocates **
WASHINGTON, D.C. – For the first time in history, a standalone cannabis policy reform bill was brought before the House of Representatives for a vote and passed with an overwhelming bipartisan majority. The Secure and Fair Enforcement (SAFE) Banking Act of 2019, or H.R. 1595, was approved 321-103, including nearly half of voting Republicans, in a suspension vote on Wednesday.
“Having worked alongside Congressional leaders to resolve the cannabis industry’s banking access issues for over six years, it’s incredibly gratifying to see this strong bipartisan showing of support in today’s House vote,” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “We owe a great debt of gratitude to the bill sponsors, who have been working with us to move this issue forward long before anyone else thought it was worth the effort.”
Due to current federal laws and financial regulations, most banks are unwilling to risk prosecution or punishment to work with state-legal cannabis businesses and often ancillary businesses that service the cannabis industry. This forces many businesses in this space to operate almost entirely in cash, creating public safety issues for everyone involved, from businesses and their employees to tax collectors and regulators. These policies also hinder the efforts of regulators and law enforcement to effectively monitor the legal cannabis market. Financial services institutions are also unable to provide loans to people in the cannabis industry, which disproportionately impacts small businesses and marginalized communities with less access to personal wealth or investment capital.
The SAFE Banking Act as approved in the House would prevent federal banking regulators from punishing banks for working with cannabis- and hemp-related businesses that are obeying state laws. The bill would 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. Access to capital for small businesses would be increased by allowing traditional lending from financial service provides, and regular reporting on loan practices involving women and people of color in the cannabis industry would be required.
H.R. 1595 was introduced in this session by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH) with more than 100 other original cosponsors, eventually reaching 206 cosponsors prior to the vote Wednesday.
“Now, it’s time for the Senate to take swift action to approve the SAFE Banking Act so that this commonsense legislation can make its way to the President’s desk,” continued Smith. “This bipartisan legislation is vital to protecting public safety, fostering transparency, and leveling the playing field for small businesses in the growing number of states with successful cannabis programs.”
The Senate version of the SAFE Banking Act, S. 1200, was introduced by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR) in April. The Senate Banking Committee held a hearing on the issue in July, and Banking Committee Chairman Mike Crapo (R-ID) recently announced that cannabis banking legislation is being seriously considered in that chamber.
NCIA will host a press conference with lawmakers and allied organizations to discuss the vote on Thursday, September 26 at 2:30 p.m. ET at the House Triangle, just outside the U.S. Capitol.