A bill that would provide legal cannabis businesses with access to banking and financial services cleared a major hurdle this week as it was approved by the Senate Banking Committee.
The Secure and Fair Enforcement Regulation (SAFER) Banking Act (S.2860), introduced by U.S. Sen. Jeff Merkley (D-OR), passed out of committee by a vote of 14-9. This is the first time the bill has gotten this far in the Senate, as it failed to get approved out of committee multiple times before. The bill has been approved in the House seven times in recent years, but never advanced in the Senate. It is the latest version of the SAFE Banking Act – which Merkley has championed since 2015.
The SAFER Banking Act would allow cannabis-related businesses to access banking and financial services in states where cannabis is legal. Currently, federal law considers marihuana sales illegal, so traditional banks are prohibited from doing business with them. That creates hardships and safety concerns for cannabis businesses, particularly in the growing number of states where it is legal. This bill bridges the gap for legal cannabis businesses.
“Forcing legal businesses to operate in all-cash is dangerous for our communities; it’s an open invitation to robberies, muggings, money laundering, and organized crime—and the only people benefiting from the current system are criminals,” Merkley said. “Passing the SAFER Banking Act through committee is an historic moment in this body. I am committed to building bipartisan momentum to finally get a bill signed into law that ends the cannabis cash economy and improves public safety across the nation.”
This version, the SAFER Banking Act, contains some key additions. Among them, it includes restorative justice provisions – such as the Harnessing Opportunity by Pursuing Expungement (HOPE) Act — which would support states with grants that want to expunge cannabis records. It also incorporates the Gun Rights and Marijuana (GRAM) Act, which would allow state-legal cannabis users to purchase and possess firearms. In addition, it includes extended safe harbor protections for Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI).
The bill has several co-sponsors from both sides of the aisle, including U.S. Sens. Steve Daines (R-MT) and Sherrod Brown (D-OH).
“The ‘SAFER Banking Act’ is a win-win for our Montana communities. On one hand, it’s about keeping our Montana communities safe, reducing the risk of crime and providing much-needed clarity for law enforcement officers. It’s also about protecting legal business’ access to financial institutions. Whether it’s a legal cannabis business, a legal gun manufacturer or a legal energy company, no Montana business should be shut out of banks or credit unions because of ideological differences,” Daines said.
The SAFER Banking Act now advances to the Senate, where it will be considered by the full Senate.
“Regardless of how you feel about states’ efforts to legalize marijuana, this bipartisan bill is necessary – it will make it safer for legal cannabis businesses and service providers to operate in their communities and protect their workers,” Brown said.
The bill has the support of several financial trade organizations, including the Credit Union National Association and the Independent Community Bankers of America (ICBA).
“The conflict between state and federal law has created legal uncertainty for community banks, inhibited access to the banking system for legal cannabis-related businesses, and created serious public safety concerns,” ICBA President and CEO Rebeca Romero Rainey said. “As the first national banking trade group to support cannabis-banking legislation and to testify before Congress on its behalf, ICBA commends the Senate Banking Committee for advancing this important measure and calls on Congress to fully pass it to enhance public safety and address regulatory compliance concerns.”