WASHINGTON, D.C. – Today, Oregon’s Senator Jeff Merkley and Senator Cory Gardner (R-CO) led a bipartisan group of Senators – including Senators Jacky Rosen (D-NV), Lisa Murkowski (R-AK), Michael Bennet (D-CO), Dan Sullivan (R-AK), Kamala Harris (D-CA), Rand Paul (R-KY), Catherine Cortez-Masto (D-NV), Kevin Cramer (R-ND), Tammy Duckworth (D-IL), Gary Peters (D-MI), Bob Menendez (D-NJ), Angus King (I-ME), Bernie Sanders (I-VT), Patty Murray (D-WA), Edward J. Markey (D-MA), Patrick Leahy (D-VT), Brian Schatz (D-HI), Ron Wyden (D-OR), Elizabeth Warren (D-MA), and Mazie Hirono (D-HI) – to introduce legislation to ensure that legal cannabis businesses can access banking services.
The Secure and Fair Enforcement (SAFE) Banking Act of 2019 would solve a key logistical and public safety problem in states that have legalized medicinal or recreational cannabis.
Currently, cannabis businesses operating under state laws that have legalized medicinal or recreational cannabis have been mostly denied access to the banking system because banks that provide them services can be prosecuted under federal law. Without the ability to access bank accounts, accept credit cards, or write checks, businesses must operate using large amounts of cash. This creates safety risks for businesses and surrounding communities, and makes it more difficult for local and state governments to collect taxes.
“Forcing legal businesses to operate in all-cash is dangerous for our communities,” said Merkley. “It’s absurd that cannabis business owners in Oregon have to shuttle around gym bags full of cash to take care of their taxes or pay their employees. Operating in cash is an invitation to robbery, money laundering, and organized crime. This is a public safety issue, and I hope that this will be the Congress when we build a bipartisan consensus to put this common-sense fix into law.”
“Conflicting federal and state marijuana laws make it difficult for legitimate businesses to use the basic financial services they need access to and this bipartisan legislation gives them that access they need,” said Gardner. “We must also take into account the risk to public safety as these businesses are being forced to carry around bags of money to pay for their employees and rent. Legal businesses should not be treated like this, and I’m glad that Republicans and Democrats are working together to address this issue.”
Bipartisan momentum in both chambers of Congress is building for common-sense cannabis banking policies. Last month, the House Financial Services Committee passed a version of the SAFE Banking Act by a bipartisan vote of 45 to 15. And on Tuesday of this week, Treasury Secretary Steven Mnuchin told a House subcommittee, “I hope this is something that this committee can on a bipartisan basis work with since there are people on both sides of the aisle that share these concerns.” Mnuchin noted that the Internal Revenue Service (IRS) has had to build “cash rooms” to accommodate taxes paid by legal cannabis companies.
The SAFE Banking Act would prevent federal banking regulators from:
· Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
· Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
· Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
· Taking any action on a loan to an owner or operator of a cannabis-related business.
The bill also creates a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services.
The bill would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.
The SAFE Banking Act has the support of the American Bankers Association (ABA), Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), Law Enforcement Action Partnership (LEAP), the Electronic Transactions Association (ETA), the National Cannabis Industry Association (NCIA), Mid-Size Bank Coalition of America (MBCA), The Real Estate Roundtable, and various U.S. trade associations such as the American Land Title Association (ALTA), American Property Casualty Insurance Association (APCIA) and the Reinsurance Association of America (RAA), among others.