Should Congress grant protections to banking institutions that provide financial services for State-Sanctioned Marijuana businesses?
This bill limits a federal banking regulator’s ability to discriminate against businesses that sell marijuana products in states where the sale of marijuana has become legal. Banks that invest in these businesses cannot be held liable for providing a service to these businesses or investing the income derived through their service. Yearly, banking institutions will submit a diversity report of their clients, including how many marijuana-related businesses they work with. This bill would not require lenders to work with state-sanctioned marijuana businesses but would create protections for the banks that work with these businesses.
Sponsor: Sen. Jeff Merkley (Democrat, Oregon)
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Opponents say
• "While 38 states and the District of Columbia have legalized cannabis for medical or recreational use, the possession, distribution or sale of cannabis is still illegal at the federal level. As a result, legally operating cannabis businesses are often denied access to banks. Proponents of the bill say the SAFE Banking Act would help legally operating businesses avoid the headaches and safety risks of dealing only in cash without affecting the legal status of cannabis beyond states where it’s legal." Source: The Hill
• "Because the SAFE Banking Act would provide financial institutions with only narrow protections for activities that have never actually been subject to the severe legal and regulatory consequences that federal law technically permits, the practical impact that a safe harbor provision would have on the financial services industry's decision to bank the cannabis industry is unknown." Source: Ohio State University Drug Enforcement and Policy Center
Proponents say
• "We’re optimistic that we will see movement on the SAFE Banking Act in the coming weeks and urge the Senate to get this bipartisan, commonsense legislation that will enhance public safety across the finish line." Source: ABA Spokesperson Jeff Sigmond
• "From a policy standpoint, the SAFE Act would make three key changes to cannabis banking laws. First, federal deposit insurance providers like the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association could not threaten or withhold coverage from a bank simply because it offers services to a legal cannabis company that is compliant with its state’s laws. Second, proceeds from state-licensed cannabis sales would not be considered unlawful. This means depositing those proceeds into banks would no longer constitute money laundering under federal law. Finally, banks could not have their assets seized for offering loans to legally operating, compliant cannabis companies." Source: Geoffrey Lawrence, Reason Foundation
• "Proponents of SAFE claim that establishing this protection for banks will result in increased and fair access to banking for the cannabis industry and that this increase in access will promote financial transparency and public safety by reducing cash within the cannabis industry. Moreover, they allege the legislation would advance goals of racial equity within the cannabis industry by helping minority operators access much-needed capital and financial services." Source: Ohio State University Drug Enforcement and Policy Center
