A bipartisan group of lawmakers reintroduced the Secure and Fair Enforcement Banking Act late last month, legislation that would free up the cannabis industry for bankers operating in states where the drug is legal.
The bill was introduced April 26 by Sen. Steve Daines, R-Mont., Sen. Jeff Merkley, D-Ore., Rep. Dave Joyce, R-Ohio, and Rep. Earl Blumenauer, D-Ore. The bill has 38 additional cosponsors in the Senate and eight additional co-sponsors in the House.
The SAFE Banking Act would prohibit federal regulators from disciplining depository institutions that provide banking services to government-licensed, cannabis-related businesses and the businesses that serve them such as plumbers or landlords. Currently, businesses that legally grow, market or sell cannabis are legally shut out of the banking system by the Controlled Substances Act and rely mainly on cash transactions. The bill would also prohibit regulators from recommending or incentivizing banks to not provide services to legal cannabis businesses or take action on a loan to either an operator or owner of a cannabis business.
Supporters of the legislation say it is needed to make the cash-heavy cannabis industry safer and to allow regulators and law enforcement to effectively monitor the sector and ensure cohesion between federal and state laws. Thirty-seven states have already legalized recreational or medicinal marijuana.
The SAFE Banking Act has already passed the House seven times, but never cleared the Senate. Partisan differences have complicated the chances of passing the bill. Senate Banking Committee Chair Sherrod Brown (D-Ohio) has said the Act as previously presented was too limited and should include sentencing reforms, a stumbling block for some Republicans. The Senate Banking Committee will take up the bill on May 11.
The American Bankers Association supports the legislation. “The SAFE Banking Act is an urgently needed, and widely supported, bipartisan solution that will allow banks to handle not only the proceeds from both state-licensed cannabis businesses and the ancillary businesses — accountants, skilled trades, landlords, law firms and other service providers — those businesses rely upon to operate, but also accept deposits from and make loans to employees of those businesses,” wrote ABA Executive Vice President Kirsten Sutton in a May 2 letter to Congress.