The SAFE Banking Act – Progress on All Fronts
Things are looking better and better for expanded cannabis banking prospects. As we’ve discussed on the blog previously, the SAFE Banking Act would allow financial institutions to serve state-legal marijuana businesses without fear of federal repercussions. Supporters of the Act have stressed the public-safety concerns that have resulted from the lucrative cannabis industry conducting business on a cash-only basis. Below is an update as to where things are at today, both inside and outside of Congress.
House Majority Leader Steny Hoyer’s office has confirmed that he intends to bring the SAFE Banking Act to the House floor for a vote this month. Majority Leader Hoyer also recently announced that he would like to advance the legislation. It is expected that the House will consider the proposed legislation next week under a procedure known as suspension of the rules, which will require a two-thirds majority to pass. Currently, there are 207 of the 435 representatives who have signed their names onto the bill as co-sponsors.
Green Bits, a software platform that most of us know and use, praised Majority Leader Hoyer’s initiative in advancing the bill. “Any legislation that allows federally regulated financial institutions to enter the cannabis sector will be a huge step forward,” said Hiro Taylor, Green Bits’ Director of Business Development. “For the sector to reach its full potential responsibly, all players in it, including federal and state governments, need to be able to operate with greater transparency, efficiency, and safety regarding payments. A bill that helps to instill those qualities into the sector is very much needed.”
The House Financial Committee voted 45-15 in favor of the SAFE Banking Act back in March.
Back in action after its August recess, the Senate is also making efforts to advance its version of the marijuana financial services bill. To date, the bill had yet to be voted out of the Senate Banking Committee. However, on Monday, the proposed legislation got its 33rd cosponsor, Sen. Tina Smith (D-MN), which means one-third of Congress is now officially on board with the legislation.
As you might recall, The Senate Banking Committee held a hearing in late July on the challenges faced by the cannabis industry in banking. The immediate response by Committee Chairman Mike Crapo was lackluster – he advised he would hold a vote on the legislation, but he didn’t make clear they would work off the existing SAFE Banking Act. “We’re working to try to get a bill ready,” Committee Chairman Crapo said in a recent interview. “I’m looking to see whether we can thread the needle.” He added, “We may craft our own bill, or we may work with them to craft any amended legislation.”
Democratic Rep. Ed Perlmutter of Colorado, who introduced the House bill, commended Committee Chairman Mike Crapo’s “commitment to resolve the banking conflicts that have been created by the misalignment in state and federal law on the issue of cannabis.” In a statement on Friday, Perlmutter added, “I remain focused on passing the SAFE Banking Act out of the House and look forward to working with my colleagues in the Senate as they take up the SAFE Banking Act or work to develop and pass similar legislation.”
Meanwhile, the Independent Community Bankers of America (“ICBA”) and 43 state banking associations joined the ever-growing list of organizations urging cannabis banking reform (which includes 50 state banking associations, the National Association of State Treasurers, the top financial regulators in 25 states, a majority of state attorneys general, and the governors of 20 states). Similar to most, the ICBA sent a letter urging lawmakers to vote on the SAFE Banking Act “as soon as possible – the current conflict between state and federal law with regard to cannabis has created increasingly significant legal and compliance concerns for banks that wish to provide banking services to [cannabis-related businesses] in jurisdictions where cannabis is legal.”
Here’s hoping Congress heeds the call, and soon.