The largest national trade association representing the U.S. banking industry is calling on congressional leaders to open the door for state-licensed cannabis businesses to access traditional financial services.
The American Bankers Association (ABA) wrote a letter to eight members of Congress on July 1, expressing the need to pass the Secure and Fair Enforcement (SAFE) Banking Act of 2026 in light of recent federal action surrounding cannabis rescheduling, a CBD pilot program and hemp-derived cannabinoid products.
The bipartisan and bicameral legislation, sponsored by Sen. Jeff Merkley, D-Ore., in the Senate and Rep. Dave Joyce, R-Ohio, in the House, would prohibit federal regulators from penalizing financial institutions simply because they choose to service the cannabis industry.
The letter, signed by ABA Chief Policy Officer Naomi Camper, was addressed to party leaders in each chamber, as well as chairmen and ranking members of the Senate Banking Committee and House Committee on Financial Services.
“The SAFE Banking Act would improve public safety, help the government combat illicit finance, and provide a critical measure of certainty in response to the evolving legal landscape by granting cannabis businesses operating in full compliance with state laws access to essential financial services,” Camper wrote.
She pointed out that nearly every state has legalized cannabis in some form, including 24 states that have legalized commercial marketplaces for adult use and another 18 states with medical-only cannabis programs.
But federal laws that collide with these state-regulated structures leave uncertainty in the legal landscape governing the proceeds from cannabis businesses, which often operate on a cash-only basis outside the regulated banking system, Camper said.
This poses a public safety concern and opens the door to illicit financial activity, according to the ABA.
“These state-legal proceeds also flow to non-cannabis businesses and service providers, including accountants, skilled trades, landlords and law firms,” Camper wrote. “The SAFE Banking Act would remove barriers to banking these funds, materially reducing the amount of cash moving through state-licensed cannabis businesses and service providers. That, in turn, would reduce the risk that these businesses are targeted by bad actors, thereby improving public safety in the communities where they operate.”
While the U.S. House passed previous versions of the SAFE Banking Act seven times under former Democratic leadership between 2019 and 2022, recent federal policy changes related to cannabis and hemp have only exacerbated the need for congressional action on banking legislation for the industry, according to the ABA.
In the letter, Camper referenced the Centers for Medicare and Medicaid Services’ CBD pilot program that commenced on April 1, allowing up to $500 per year in coverage of doctor-recommended CBD products containing no more than 0.3% delta-9 THC and no more than 3 milligrams per serving of total THC in orally transmitted form.
The ABA chief policy officer also drew attention to an April order from President Donald Trump’s administration that immediately reclassified state-licensed medical cannabis from Schedule I to III under the Controlled Substances Act, as well as the Drug Enforcement Administration’s current administrative law judge hearing to consider loosening restrictions on all cannabis (medical or nonmedical) under a Schedule III listing.
And she mentioned the November 2026 implementation of the federal government’s forthcoming ban on intoxicating hemp products, specifically those that contain more than 0.4 milligrams of total THC per container, or cannabinoids that are synthesized outside the plant (i.e., delta-8 THC) or incapable of being naturally produced (i.e., HHC).
These changes have “substantially increased the complexity” of banking cannabis- and hemp-related proceeds, Camper said.
“As a result, the volume of marijuana-related products and state-licensed proceeds is likely to increase substantially, exacerbating potential public safety and illicit finance risks,” she wrote. “SAFE Banking would provide needed certainty by allowing these funds to enter – or remain in – the regulated banking system.”
Under the SAFE Banking Act of 2026, federal banking regulators could not:
- Prohibit or discourage a bank from providing financial services to a state-legal cannabis business;
- Terminate or limit a bank’s federal deposit insurance primarily because the bank is providing services to a state-legal cannabis business;
- Recommend or incentivize a bank to halt or downgrade providing any kind of banking services to these businesses; or
- Take any action on a loan to an owner or operator of a state-legal cannabis business.
Although some industry stakeholders believe a Schedule III listing will open the door to more financial services, federally regulated banks still carry the risks of serving businesses that deal in a controlled substance that is not federally approved.
“Highly regulated banks and other financial institutions must adhere to stringent anti-money laundering and counter-terrorist financing laws and rules, conduct due diligence regarding their customers, screen transactions for suspicious activity and keep records,” Camper wrote. “Bringing these state-licensed businesses and their proceeds into the formal financial system would provide a meaningful level of transparency and accountability by enabling financial institutions to better identify and report illicit finance risk.”
Moreover, the SAFE Banking Act of 2026 would:
- Create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services;
- Provide protections for hemp and hemp-derived cannabidiol (CBD) related businesses; and
- Require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and adult-use cannabis policies.
No matter how federal policies surrounding the Schedule III hearing and forthcoming intoxicating hemp product ban play out, Camper said the legislation would provide “important legal and regulatory clarity” for financial institutions hoping to service state-legal cannabis businesses.
“Regardless of how these legal and regulatory changes unfold, the bipartisan, bicameral SAFE Banking Act would establish a clear federal framework for businesses, our communities and the banks that serve them; enable state-licensed cannabis businesses to access essential financial services; mitigate public safety risk; and help prevent and detect unlawful activity,” she wrote.
The ABA urged congressional leaders to co-sponsor the legislation and requested that they promptly consider the SAFE Banking Act in both the Senate Banking and House Financial Services committees.
“ABA further urges timely passage by Congress,” Camper wrote.
