Washington State Treasurer Mike Pellicciotti is urging Congress to pass the SAFE Banking Act, legislation that would provide protections to financial institutions serving legal cannabis-based businesses.
Washington was one of the first states to legalize cannabis, and the industry now generates over $500 million annually in revenue for the state alone.
“We can no longer have the industry without access to banking when billions of dollars are changing hands in cash each year,” Pellicciotti wrote in a letter to his fellow state Treasurers.
He called on Congress to pass the Secure and Fair Enforcement (SAFE) Banking Act, which passed the House six times but has not been able to get through the Senate. Most recently, the House passed the bill 222-210 as part of the America COMPETES Act, sweeping legislation to bolster America’s competitiveness with China, among other things.
However, when the America COMPETES Act went to the Senate for a vote, the SAFE Banking Act was stripped out of it. So now, the two houses of Congress will settle on a final version of the bill, which Pellicciotti hopes will contain the SAFE Banking Act.
“I remain hopeful that the SAFE Banking Act can finally pass the Senate this year with our collective efforts,” he wrote to his fellow state treasurers. “State treasurers are in a unique position as advisors to our senators on these financial needs. I hope you engage your senators at this critical time as a SAFE Banking advocate in the weeks ahead. It is not every day that state treasurers are at the forefront of such an urgent public safety issue, but we must be today.”
The SAFE Banking Act, sponsored by U.S. Rep. Ed Perlmutter (D-CO), would prohibit federal regulators from taking punitive measures against depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses that serve them.
Currently, financial institutions that provide banking services to legitimate and licensed cannabis businesses under state laws are subject to criminal prosecution under several federal statutes such as “aiding and abetting” a federal crime and money laundering. Thus, cannabis businesses in states where it is legal are locked out of the banking system. This makes it difficult for them to maintain a checking account, access credit, accept credit and debit cards, meet payroll, or pay tax revenue. It has also created a public safety risk, as these businesses are forced to operate as cash-only businesses. These high-volume cash businesses are being targeted by violent criminals, inviting robberies and crime.
The SAFE Banking Act establishes a safe harbor for any bank that provides banking services to legal cannabis businesses, harmonizing federal laws with state laws.
The bill is supported by several organizations, including the American Bankers Association, American Council of Life Insurers, Insured Retirement Institute, and the Credit Union National Association.