SAFE Banking Act would protect financial institutions working with the legal cannabis industry
WASHINGTON, D.C. – The Secure and Fair Enforcement (SAFE) Banking Act was introduced in the Senate on Thursday by Sens. Jeff Merkley (D-OR) and Cory Gardner (R-CO), along with 20 cosponsors. The bipartisan legislation, which was introduced in the House last month, would protect banks and other financial institutions from prosecution and ease restrictions for providing services to cannabis businesses that are in compliance with state laws.
The House companion bill, H.R. 1595, was introduced in February by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH). The bill was approved with bipartisan support in the House Financial Services Committee in March and currently has 158 cosponsors.
“Lack of access to financial services is creating public safety problems for the rapidly growing legal cannabis industry, as well as interfering with transparency and access to capital for small businesses,” said Aaron Smith, executive director of the National Cannabis Industry Association. “The Senate now has the opportunity to keep up the momentum that the SAFE Banking Act has in the House and address this important issue.”
“Forcing legal businesses to operate in all-cash is dangerous for our communities,” said Sen. Merkley. “It’s absurd that cannabis business owners in Oregon have to shuttle around gym bags full of cash to take care of their taxes or pay their employees. Operating in cash is an invitation to robbery, money laundering, and organized crime. This is a public safety issue, and I hope that this will be the Congress when we build a bipartisan consensus to put this common-sense fix into law.”
The SAFE Banking Act would prevent federal banking regulators from sanctioning 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 Tuesday, Treasury Secretary Steven Mnuchin called on Congress to address the cannabis banking issue, citing the inability of financial regulators to solve the problems caused by the lack of access to banking services.
Cannabis is legal for adults in ten states, Guam, 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.