Colorado U.S. Senator Michael Bennet today joined a bipartisan group of senators in reintroducing legislation to ensure that legal cannabis businesses can access banking services.
"The lack of access to banking services for marijuana businesses is a public safety issue in Colorado," Bennet said. "Operating on a cash-only basis results in unnecessary safety risks for both employees and customers and creates compliance and oversight challenges. This common-sense bill would allow our banking system to serve marijuana companies the same way they serve any other legal place of business."
The Secure and Fair Enforcement (SAFE) Banking Act of 2019 would solve a key logistical and public safety problem in states that have legalized medicinal or recreational cannabis.
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.
Bipartisan momentum in both chambers of Congress is building for common-sense cannabis banking policies. Last month, the U.S. House Committee on Financial Services passed a version of the SAFE Banking Act by a bipartisan vote of 45 to 15. And on Tuesday of this week, U.S. Treasury Secretary Steven Mnuchin told a House subcommittee, "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." Secretary Mnuchin noted that the Internal Revenue Service (IRS) has had to build "cash rooms" to accommodate taxes paid by legal cannabis companies.
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 incenting 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 would 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 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.
The SAFE Banking Act has the support of the American Bankers Association (ABA), Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), Law Enforcement Action Partnership (LEAP), the Electronic Transactions Association (ETA), the National Cannabis Industry Association (NCIA), Mid-Size Bank Coalition of America (MBCA), The Real Estate Roundtable, and various U.S. trade associations such as the American Land Title Association (ALTA), American Property Casualty Insurance Association (APCIA) and the Reinsurance Association of America (RAA), among others.