WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, joined U.S. Senators Jeff Merkley (D-OR) and Steve Daines (R-MT) to introduce the bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which would provide legal cannabis businesses 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.
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“Barring legal cannabis businesses from accessing traditional banking services puts unnecessary risk on business owners and the community. The SAFE Banking Act safeguards cannabis businesses owners from being unfairly punished so they can access services to protect their money and succeed in this thriving industry,” Durbin said.
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 emerging cannabis industry.
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 a 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.
In addition to Durbin, Merkley, and Daines, 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), 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), and Cynthia Lummis (R-WY).
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.
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