The House Financial Services Committee advanced last week legislation that allows marijuana-related businesses in states with existing regulatory structures to access the banking system.
The Secure and Fair Enforcement (SAFE) Banking Act of 2019 advanced the committee by a vote of 45 to 15. It now moves to the full House floor for further consideration.
Cannabis is currently considered illegal under federal law, so banks that providing services to legitimate and licensed marijuana businesses in states where it is legal are subject to criminal prosecution. This is because state and federal law are not aligned on the issue. Thus, legitimate businesses marijuana businesses are forced to operate on a cash-only basis, which opens up the opportunity for tax evasion, money laundering and other white-collar crimes.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs. These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions. Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer,” Rep. Ed Perlmutter (D-CO), one of the bill’s co-sponsors said. “While Congress has stuck its head in the sand for many years, this Committee has shown leadership on this issue and I want to thank my cosponsors and members of the Committee for their support.”
Reps. Denny Heck (D-WA), Warren Davidson (R-OH), and Steve Stivers (R-OH) also sponsored the bill.
“With this vote, the Financial Services Committee took a stand for public safety and transparency. The SAFE Banking Act will enhance public safety by giving those operating legitimate marijuana establishments access to banking services available to other industries,” Heck said. “These businesses will no longer need to deal exclusively in cash. The SAFE Banking Act will help ensure the fair treatment of those who work for or do business with a legitimate marijuana business. Finally, the SAFE Banking Act will make the marijuana industry more transparent and accountable by ensuring compliance with current regulations and norms.”
A companion bill is expected to be introduced in the Senate in the coming weeks.
The bill also has the support of the American Bankers Association (ABA), Credit Union National Association, Independent Community Bankers of America, the Electronic Transactions Association, the National Cannabis Industry Association, Mid-Size Bank Coalition of America, The Real Estate Roundtable, and various U.S. trade associations such as American Land Title and American Property Casualty Insurance Association, among others.
“We applaud Chairwoman Waters and the House Financial Services Committee for its strong bipartisan support of the SAFE Banking Act, which is an important step forward in providing regulatory and legal clarity for financial institutions caught in the conflict between state and federal cannabis laws,” Rob Nichols, ABA president and CEO, said. “More than two-thirds of the U.S. population now live in a state where cannabis has been legalized in some form, yet federal law prohibits banks from serving cannabis businesses in those states. It’s also forcing them to end banking relationships with longtime customers such as law firms, suppliers and utilities that do business with the cannabis industry. We encourage the full House to move forward with a floor vote on the bill and urge the Senate to take up this important issue.”