SAFE Banking Act Reintroduced in Senate
Less than a week after a bipartisan group of lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act into the House, the Senate has followed suit with its version.
Refiled by Sens. Jeff Merkely (D-OR) and Steve Daines (R-MT) on Tuesday, the bill currently has 30 co-sponsors.
A total of 21 Democrats, seven Republicans and two independents are currently backing the bill, which would allow state-legal cannabis companies to access traditional commercial banking services.
As written, the bill would establish protections for financial institutions that provide services to legal cannabis businesses.
Specifically, it stipulates that federal banking regulators cannot “terminate or limit the deposit insurance or share insurance” or “take any other adverse action against a depository institution” simply because it provides banking services to cannabis companies operating in compliance with state laws.
The bill also prevents regulators from prohibiting, penalizing or discouraging major banks from providing financial services to the cannabis sector.
“Most legal cannabis businesses operate entirely in cash, because of a nonsensical rule barring them from the financial services they need — leaving them open to robbery and money laundering,” Merkley wrote on Twitter. “The SAFE Banking Act would correct that.”
Indeed, because cannabis is not federally legal, major financial institutions often refuse to work with state-legal adult-use and medical cannabis firms.
While some cannabis firms have been able to establish checking accounts with smaller banks and credit unions, they have typically been shut out from obtaining commercial loans and are still unable to process credit card transactions.
This has forced the industry to deal mostly in cash, which exposes businesses to increased risk and invites behavior such as theft and tax evasion.
“This creates numerous public safety and transparency issues for the industry, law enforcement, government officials, and other service providers, and has led to cannabis businesses being increasingly targeted by criminals with sometimes fatal results,” the National Cannabis Industry Association (NCIA) wrote in a news release.
For his part, Sen. Daines said the bill would “help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies.”
The Democrats are now in control of both the House and the Senate, as well as the White House, giving industry stakeholders renewed optimism for the passage of the SAFE Banking Act.
A previous version of the bill overwhelmingly passed the House in 2019 by a vote of 321-103 but later stalled in the Republican-controlled Senate.
“With new Senate leadership now firmly in favor of cannabis policy reform, we are optimistic that this narrowly tailored — but absolutely necessary — legislation will be allowed to progress through the hearing process without delay,” NCIA co-founder and CEO Aaron Smit said.
“This bill is a meaningful first step that will have immediate benefits in terms of safety, transparency, fairness, and much-needed economic opportunities while Congress continues working toward more comprehensive solutions to end prohibition and sensibly regulate cannabis,” he added.