Washington, D.C. – Oregon’s U.S. Senator Jeff Merkley and U.S. Senator Steve Daines (R-MT) today introduced the bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which would ensure that legal cannabis businesses have access to critical banking services.
Most state legal medicinal or recreational cannabis businesses are denied access to the banking system because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. The lack of access to bank accounts, credit cards, and checks have forced state legal cannabis businesses to operate in cash, opening the door to tax evasion and to a dangerous pattern of robberies, including one that resulted in the murder of a store clerk in Portland.
Giving state legal cannabis businesses access to banking services would not only improve community safety, but also make it easier for Americans of color—who have long been disproportionately impacted by America’s racist ‘War on Drugs’ policies and generations of asset-stripping policies and practices—to access the capital necessary to participate in the merging cannabis industry.
“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” said Merkley. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”
“Montana businesses shouldn’t have to operate in all cash—they should have a safe way to conduct business,” Daines said. “My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment. This in turn will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”
To address the safety concerns resulting from these state legal businesses being shut out of banking services, the SAFE Banking Act would prevent federal banking regulators from:
- Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
- Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
- Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
- Taking any action on a loan to an owner or operator of a cannabis-related business.
The bill also creates 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. The bill also provides protections for hemp and hemp-derived CBD related businesses.
The bill would 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 recreational cannabis policies.
Momentum around the SAFE Banking Act reached new heights in the 116th Congress, when the U.S. House of Representatives passed the legislation, and included it in the HEROES Act.
The legislation is cosponsored by U.S. Senators Kyrsten Sinema (D-AZ), Edward J. Markey (D-MA), Alex Padilla (D-CA), Patrick Leahy (D-VT), Richard Durbin (D-IL), Ron Wyden (D-OR), Mazie Hirono (D-HI), Tina Smith (D-MN), Angus King (I-ME), Catherine Cortez Masto (D-NV), Michael Bennet (D-CO), Robert Menendez (D-NJ), Jon Tester (D-MT), Jacky Rosen (D-NV), Kevin Cramer (R-ND), Dan Sullivan (R-AK), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), Chris Murphy (D-CT), Gary Peters (D-MI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Rand Paul (R-KY), Bill Cassidy (R-LA), Cynthia Lummis (R-WY), and Lisa Murkowski (R-AK).
Last week, the legislation was introduced by Representatives Ed Perlmutter (D-CO-7), Nydia M. Velázquez (D-NY-07), Steve Stivers (R-OH-15), and Warren Davidson (R-OH-08) and over 100 of their colleagues in the U.S. House of Representatives.
Full text of the legislation is available here.