A bipartisan group of US lawmakers has reintroduced legislation to give legal cannabis companies improved access to banking services routinely used by other companies around the country. The bill, the Safe and Fair Banking (SAFE) Act of 2023, was rewritten in the Senate late last month by Democratic Sen. Jeff Merkley of Oregon and Sen. Steve Daines, R-Montana. Republican Representative Dave Joyce of Ohio and Oregon Democratic Representative Earl Blumenauer have introduced a companion bill in the House, where previous versions of the legislation have been approved seven times.
Because marijuana remains illegal at the federal level, cannabis companies that operate legally under state or tribal law often have difficulties obtaining traditional banking services such as payroll accounts and credit card transaction processing. Banks and credit unions that choose to do business with cannabis companies must follow strict regulations and risk facing prosecution under drug and money laundering laws for non-compliance. As a result, the regulated cannabis economy is largely conducted in cash, leaving businesses, employees, and customers vulnerable to crimes including armed robberies. Sponsors of the legislation also point out that companies operating in an entirely cash-based economy pose a greater risk of tax evasion.
This legislation will save lives and livelihoods. It is time for Congress to address the irrational, unfair, and unsafe ban of essential banking services to state legal cannabis companies.” he said in a statement On April 26th. The House has passed the SAFE Banking Act on a bipartisan basis seven times. I’m glad the Senate is joining us in making it a priority.”
A bill that protects banks that serve the cannabis industry
If passed by Congress and signed into law by President Biden, the Safe Banking Act Federal banking regulators will prevent or restrict any bank from providing services to a regulated cannabis business that operates legally under state law. The same protections also apply to banks serving other businesses associated with the regulated cannabis industry, such as attorneys and commercial rental property owners. Banks’ federal regulators would also be prevented from terminating or restricting a bank’s Federal Deposit Insurance in the first place because the bank provides services to state-mandated cannabis or related businesses.
said Joyce, who also serves as co-chair of the Congressional Cannabis Caucus. “Not only is this distorting the market in a growing industry, but it is also forcing companies to run with all the cash, leaving them and their employees on par with them to commit violent robberies. The SAFE Act would allow bipartisan banking to operate legally without fear of retribution from federal regulators making our communities safer.”
In addition, the Banking SAFE Act prohibits regulators from taking any action against a loan to a cannabis business owner or operator and from recommending or offering incentives to banks to stop or reduce services to a legal cannabis business. The legislation also creates a safe haven from criminal prosecution, liability and forfeiture of assets for banks, their officers and employees who provide financial services to a legitimate state-sanctioned cannabis business, and the right not to provide such services will be preserved. The latest version of the bill, which has been revised slightly compared to previous iterations, also extends safe harbor protections to community development financial institutions (CDFIs) and minority depository institutions (MDIs) that provide business loans to minority-owned businesses, According to a report.
The legislation has been approved seven times in the House of Representatives
Previous versions of the SAFE Banking Act have been passed by the House seven times, but the Senate has failed to bring the bill to a vote under both Republican and Democratic leadership. Last year, Democratic leaders introduced an improved version of the legislation known as SAFE Banking Plus that also included provisions to overturn previous federal convictions for marijuana-related crimes, but that law also failed to advance. Democratic leaders hope the version introduced last month without disqualification provisions will get a hearing in the Senate Banking Committee before advancing to the floor.
“Forcing legal firms to work with every cash is dangerous for our communities; it’s an open invitation to… theftmoney laundering, organized crime — and it’s time to fix it,” Merkley said. For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the Senate floor. Let’s make 2023 the year this bill is signed. into law so that we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, businesses and communities safe.”
The SAFE Banking Act of 2023 has broad support in both houses of Congress. In addition to the primary sponsors, the legislation has the support of 38 additional sponsors in the Senate, including five Republicans. In the House, the bill has eight additional sponsors, split evenly between Democrats and Republicans. The bill has been referred to the Senate Banking Committee for consideration, as well as three House committees.