Lawmakers in both chambers of Congress reintroduced the Secure and Fair Enforcement (SAFE) Banking Act this week with bipartisan support. The legislation was introduced by Sens. Steve Daines (R-MT) and Jeff Merkley (D-OR) in the upper chamber. Reps. Earl Blumenauer (D-OR) and David Joyce (R-OH) introduced it in the House. It would create a safe harbor for financial institutions to provide services to licensed, state-legal cannabis businesses.
The latest version also provides protections for Minority Depository Institutions and Community Development Financial Institutions wanting to support cannabis businesses. It makes it easier for people working in the marijuana industry to obtain mortgage loans.
Under current federal policy, financial institutions are discouraged from providing services to the regulated cannabis industry. According to the Treasury Department, only 11% of US banks and 4% of credit unions provide services to marijuana businesses.
70% of Cannabis Businesses Say Banking Is Top Challenge
Whitney Economics reported 70% of cannabis businesses say lack of access to banking is their top challenge. Lack of access to banking services forces many businesses to operate predominantly in cash. That increasingly makes them targets for crime. It also impedes the efforts of law enforcement and regulators to effectively monitor financial transactions.
“If cannabis businesses are to have any hope of operating safely, transparently, and in a manner that is competitive with the existing underground market, Congress must pass SAFE Banking now,” said NORML Political Director Morgan Fox. “It is irresponsible to shut this heavily regulated industry out of the US financial system. Every day that Congress fails to act further endangers small businesses and consumers, puts regulators and law enforcement at a disadvantage. It facilitates the activities of unlicensed operators and criminal organizations.”
The House previously approved the SAFE Banking Act seven times as a stand-alone bill or as part of broader legislation. But it has not made progress in the Senate. Attempts to add cannabis banking reform to must-pass legislation in the upper chamber at the end of the last session were blocked by Senate Republicans.
72% of Voters Support Banking Access
A Data For Progress poll published in November 2022 showed that 72% of voters – including nearly two-thirds of Republicans – support allowing licensed marijuana businesses to lawfully access US financial systems.
“The vast majority of Americans across the political spectrum support cannabis banking reform,” said Fox. “Even lawmakers representing the rapidly dwindling number of states without some form of regulated cannabis market should be able to see the necessity of passing this narrowly tailored, commonsense legislation that encourages small business growth, improves accountability, and saves lives.”
Marijuana is legal for medical purposes in 38 states, and 22 states have legalized adult use. Kentucky passed a medical cannabis bill into law in March, and Delaware became the latest state to approve legal adult use earlier this month. Adult-use legislation is progressing quickly in Minnesota.
