The Secure and Fair Enforcement Act has been reintroduced in the Senate following previous introduction by the House of Representatives. The legislation, which would open the traditional banking system to cannabis-related businesses, was initially approved by the House when it was introduced in 2019, but has not yet passed in the Senate.
Sens. Jeff Merkley (D-Ore.) and Steve Daines (R-Mont.) introduced the bill, which would establish a cannabis-banking safe harbor for banks in states where cannabis is legal. Banks that service the marijuana industry currently face a conflict between state and federal law, in which cannabis is still classified as a Schedule 1 illegal drug. This has led to legal uncertainty for banks and cannabis businesses legal at the state level, and requires most operations to be cash-based.
In the states that have legalized the medical and recreational use of marijuana, federal regulators would not be allowed to threaten or limit a bank’s deposit insurance, downgrade a loan, prohibit or discourage the provision of banking services, or take any other prejudicial action on banks solely for serving a CRB.
The American Bankers Association and the Independent Community Bankers of America have both expressed support for the legislation due to its potential to enhance public safety and address bankers’ compliance concerns. “The current conflict between state and federal law with regard to cannabis has created increasingly significant legal and compliance concerns for banks,” wrote ICBA President and CEO Rebeca Romero Rainey in a letter backing the legislation.
“The bipartisan SAFE Banking Act would be an important step toward enabling financial services for cannabis-related businesses,” wrote ABA President Rob Nichols in a letter urging the Senate to pass the bill.
“The SAFE Banking Act will allow financial institutions the certainty they need to start banking legitimate cannabis businesses,” said Colorado U.S. Rep. Ed Perlmutter, who introduced the bill in the House. “It is a crucial step forward for the cash-only industry and will help prevent illicit activity, improve transparency and accountability, and reduce the public safety risk in our communities”