U.S. Sens. Jeff Merkley (D-OR) and Cory Gardner (R-CO) have reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the U.S. Senate as the House companion bill, HR 1595, gains momentum.
The bipartisan legislation, which has 20 cosponsors in the Senate, would protect banks and other financial institutions from federal prosecution when working with cannabis-related businesses that are operating in compliance with state laws. Federal banking regulators would be prohibited from sanctioning banks for working with state-compliant cannabis businesses or terminating their services, taking action on loans granted 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. Further, the legislation requires the Financial Institution Council to develop guidance to help credit unions and banks understand how to legally serve cannabis businesses.
“Forcing legal businesses to operate in all-cash is dangerous for our communities,” Merkley said in a public statement. “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 House version of the bill was introduced by Rep. Ed Perlmutter (D-CO) and a bipartisan group of 108 cosponsors. The legislation was approved by the House Financial Services Committee last month and currently has 165 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, in a public statement. “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.”
Last week, Treasury Secretary Steve Mnuchin called on Congress to provide a legislative fix for the banking issues facing the cannabis industry. “There is not a Treasury solution to this. There is not a regulator solution to this,” he said. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with."