U.S. Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), and Don Young (R-AK) introduced legislation to allow marijuana-related businesses in states where it is legal to access the banking system.
The Secure and Fair Enforcement Banking Act (SAFE Banking Act), formerly known as the Marijuana Businesses Access to Banking Act, ensures financial institutions can service marijuana-related businesses without the fear of reprisal from the federal government.
Currently, hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes, the lawmakers said.
Eight states and Washington, D.C. now allow for adult-use recreational marijuana and 29 states have legalized medical marijuana. The legislators said it is time to align federal and state laws for companies in the marijuana business.
“With the majority of states now allowing for some form of recreational or medical marijuana, we have reached a tipping point on this issue and it’s time for Congress to act,” Perlmutter said. “Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels.”
Currently, financial institutions who provide banking services to legitimate marijuana businesses are subject to criminal and civil liability for “aiding and abetting” a federal crime and money laundering under the Controlled Substances Act and federal banking statutes.
“Since we first introduced this legislation, voters in a total of six states and the District of Columbia have joined Colorado and Washington state in approving adult use of recreational marijuana,” Heck said. “Nearly a quarter of the U.S. population now lives in a place where adult use is legal. And yet because of these federal restrictions, cash will continue to reign just as it did on the black market,” Heck continued.
The SAFE Banking Act removes uncertainty by providing “safe harbor” protections for depository institutions who provide a “financial product or service” to a covered business. For example, federal banking regulators would not be able to threaten or limit a bank or credit union’s deposit insurance, take any action or downgrade a loan made to a covered business, or force a depository institution to halt providing any kind of banking services to a marijuana-related legitimate business.
“This legislation is an important step to ensuring marijuana businesses across the nation – who continue to operate in a very uncertain and insecure environment without access to banks or financial institutions – can be treaty fairly and as legitimate contributors to state and local economies,” Young, who is co-founder of the Congressional Cannabis Caucus, said. “While I do not personally advocate for the use of marijuana, I do support these types of issues as a matter of states’ rights and the ability to determine the nature of criminal activity within their own jurisdictions.”
A companion bill is expected to be re-introduced later this month in the Senate.