A bipartisan group of Senators recently revised legislation to normalize the cannabis industry for bankers operating in states where the drug is legal.
Unveiled Sept. 20, the Secure and Fair Enforcement Regulation Banking Act would authorize banks to serve legally operating cannabis businesses in states where the drug is legalized.
The SAFER Banking Act is a revision of the SAFE Banking Act, which was reintroduced earlier this year after having already passed the House of Representatives seven times. The bill has faced hurdles in the Senate as partisan differences complicated its chance of passing.
According to MJBiz Daily, provisions added to the revised bill include a requirement that federal regulators implement uniform guidance and examination procedures for legacy cannabis-related deposits, and update guidance for hemp-related service providers and businesses. Regulators would be banned from ordering banks to close an account except for a valid reason, and employees of state-legal cannabis businesses would be protected when attempting to secure residential mortgages funded through a federal program.
The legislation would allow businesses to access deposit accounts, insurance and other financial services, and create standards for banks to increase access to deposit accounts for underbanked groups. Supporters of passing a cannabis banking safe harbor say it is needed to make the cash-heavy industry safer, allow regulators and law enforcement to effectively monitor the sector and ensure cohesion between federal and state laws.
The Senate Banking Committee is scheduled to vote on the bill Sept. 27. Sponsors include Senate Majority Leader Chuck Schumer (D-N.Y.), Cory Booker (D-N.J.), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.) Steve Daines (R-Mont.), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.), Dan Sullivan (R-Ark.) and Kyrsten Sinema (I-Ariz.).
“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small-business loans,” the sponsors said in a joint statement. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”
In a press release, Daines said he secured protections for gun manufacturers and energy companies as part of the bill. “The SAFER Banking Act is about keeping our Montana communities safe and reducing the risk of crime but it’s also an important opportunity to ensure all legal businesses, including firearm manufacturers and energy producers, are protected from the left’s woke agenda,” he added.
Forty-seven states have legalized medical or recreational cannabis over the last decade. However, cannabis remains federally illegal under the Controlled Substances Act, which has blocked cannabis businesses from being able to have deposit accounts, secure lines of credit and access other financial services.
The revised legislation came less than a month after the Biden administration’s Department of Health and Human Services recommended that the Drug Enforcement Administration loosen federal restrictions on marijuana but didn’t call for it to be removed from the Controlled Substances Act. Cannabis is currently listed as a Schedule I substance, meaning that it carries a high likelihood of abuse without any medical uses. Under Biden’s plan, cannabis would be reduced to a Schedule III substance.
