This week, U.S. Senator Kirsten Gillibrand is pushing for the bipartisan, bicameral Secure and Fair Enforcement (SAFE) Banking Act to ensure that legal cannabis businesses have access to critical banking and financial services. Most state legal medicinal or recreational cannabis businesses are denied access to traditional and secure banking systems and financial services because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. Due to the lack of access to financial services, state legal cannabis businesses are forced to operate their businesses solely using cash, opening the door to potential tax evasion and increasing the potential for criminal activity. The SAFE Banking Act is led by Senator Jeff Merkley (D-OR), Senator Steve Daines (R-MT), Congressman Dave Joyce (R-OH-14), and Congressman Earl Blumenauer (D-OR-03).
“Legal cannabis businesses need access to safe and stable financial services to keep their employees, business, and community safe,” said Senator Gillibrand. “The SAFE Banking Act is a bipartisan solution that will help grow our economy and enable banks to provide financial services to this industry without fear of being penalized.”
Specifically, the SAFE Banking Act would prevent federal banking regulators from:
1. 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 a lawyer or landlord providing services to a legal cannabis business);
2. Terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business;
3. Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
4. Taking any action on a loan to an owner or operator of a cannabis-related business.
The SAFE Banking Act would also create 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 cannabidiol (CBD) related businesses.
This legislation, for the first time, explicitly extends the safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) to ensure they can also serve cannabis businesses. CDFIs and MDIs serve underserved communities who face challenges in accessing capital and provide affordable access to financial services.
In addition to Senator Gillibrand, this legislation is cosponsored in the Senate by U.S. Senators Jacky Rosen (D-NV), Bill Cassidy (R-LA), Cynthia Lummis (R-WY), Brian Schatz (D-HI), Lisa Murkowski (R-AK), Edward J. Markey (D-MA), Kevin Cramer (R-ND), Ben Ray Luján (D-NM), Dan Sullivan (R-AK), Catherine Cortez Masto (D-NV), Rand Paul (R-KY), Angus King (I-ME), Tammy Duckworth (D-IL), John Fetterman (D-PA), Ron Wyden (D-OR), Kyrsten Sinema (I-AZ), Alex Padilla (D-CA), Dick Durbin (D-IL), Peter Welch (D-VT), MarkKelly (D-AZ), Michael Bennet (D-CO), Patty Murray (D-WA), Tina Smith (D-MN), Amy Klobuchar (D-MN), Elizabeth Warren (D-MA), Tim Kaine (D-VA), Debbie Stabenow (D-MI), Bernie Sanders (I-VT), Bob Menendez (D-NJ), Chris Coons (D-DE), Jon Tester (D-MT), Mark Warner (D-VA), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Mazie Hirono (D-HI), Gary Peters (D-MI), and Chris Murphy (D-CT).
In the House, this legislation is cosponsored by U.S. Representatives Warren Davidson (R-OH-08), Jim Himes (D-CT-04), Brian Mast (R-FL-21), Barbara Lee (D-CA-12), Guy Reschenthaler (R-PA-14), Nydia Velázquez (D-NY-07), Lori Chavez-DeRemer (R-OR-05), and Lou Correa (D-CA-46). The SAFE Banking Act has passed the House seven times with strong bipartisan support.
Bill text can be found here.