WASHINGTON, D.C. – Momentum is building today for Senator Jeff Merkley’s Secure and Fair Enforcement (SAFE) Banking Act, as the Senate Banking Committee held a hearing to consider the bipartisan legislation to solve banking access for legal cannabis businesses.
Merkley testified at the hearing, as did Oregonian Rachel Pross, the Chief Risk Officer of Maps Credit Union. Video of Merkley’s testimony before the committee is available here, and his written testimony is available here.
“Forcing businesses to operate in cash is an invitation to crime, money laundering, and robbery,” said Merkley. “Whether you’re for or against legal cannabis, we all agree that we want our communities to be safe from fraud and crime. That’s why this legislation has significant bipartisan support in both houses of Congress. I’m pleased to see the momentum for this legislation continue to grow, and I’m going to keep fighting to get this legislation over the finish line in this Congress.”
At the hearing, Merkley submitted more than 100 stories into the record from Americans who have been affected by the lack of banking services for legal cannabis businesses. In some cases, even companies who do business with legal cannabis businesses—such as landlords and security firms—have had their banking services cut off.
Merkley first introduced the SAFE Banking Act in 2015, after hearing from Oregon businesses who were struggling with a lack of banking services following Oregon’s legalization of adult-use recreational cannabis. Merkley has worked to build support for the legislation in Congress, and re-introduced the SAFE Banking Act this spring with five Republican co-sponsors.
Currently, cannabis businesses operating under state laws that have legalized medicinal or recreational cannabis have been mostly denied access to the banking system because banks that provide them services can be prosecuted under federal law. Without the ability to access bank accounts, accept credit cards, or write checks, businesses must operate using large amounts of cash. This creates safety risks for businesses and surrounding communities, and makes it more difficult for local and state governments to collect taxes.
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.
Momentum has grown swiftly for the legislation in 2019 as the House, Senate, and Administration have all expressed interest in solving this challenge. The House Financial Services Committee passed the SAFE Banking Act in March by a vote of 45-15. And Treasury Secretary Steven Mnuchin testified before Congress this spring that the Internal Revenue Service (IRS) has had to build “cash rooms” to accommodate taxes paid by legal cannabis companies and added, “I hope this is something that this committee can on a bipartisan basis work with, since there are people on both sides of the aisle that share these concerns.”
The next step for the SAFE Banking Act would be for the Senate Banking Committee to pass the legislation out of committee, followed by a vote of the full Senate and House on the floor of each respective chamber before being signed into law by the President.