A bipartisan group of senators on Wednesday introduced a newly revised bill to give state-legal cannabis companies access to business banking services. Dubbed the Secure and Fair Enforcement Regulation (SAFER) Banking Act, the legislation is sponsored by Democratic Sen. Jeff Merkley of Oregon and Sen. Steve Daines, a Republican from Montana.
The bill is a revamped version of the Secure and Fair Enforcement (SAFE) Banking Act, a bill to provide cannabis companies access to traditional banking services that was passed by the House of Representatives seven times. Under current federal law, providing such services is strictly regulated, leaving many businesses—particularly small, independent operators—without access to bank accounts, credit card processing and other financial services. As a result, many businesses operate strictly in cash, leaving operators and their customers and staff vulnerable to crime.
The new cannabis banking bill comes only three weeks after the Biden administration recommended that marijuana be reclassified under federal drug laws. Last week, congressional researchers reported that the DEA is “likely” to follow the recommendation to reschedule marijuana from Schedule I to Schedule III of the Controlled Substances Act.
Senators Laud Revised Cannabis Banking Bill
After the newly revised legislation was introduced, a group of senators including the bill’s sponsors and co-sponsors Senate Majority Leader Chuck Schumer of New York, Arizona independent Sen. Kyrsten Sinema and Wyoming Republican Sen. Cynthia Lummis released a statement supporting the legislation, noting the measure is scheduled for a Senate committee markup hearing to be held next week.
“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the group of senators wrote in a joint statement. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk. We look forward to the markup of this bill in the Senate Committee on Banking, Housing and Urban Affairs on September 27th.”
The new bill is the result of months of negotiation between senators over some provisions of the original SAFE Banking Act. Key changes to the bill cited by MJBizDaily include a requirement that federal regulators “develop uniform guidance and examination procedures – including legacy cannabis-related deposits” and “update guidance related to hemp-related businesses and service providers.” Regulators would be prohibited from ordering banks to close an account “unless there is a valid reason.” The legislation also includes language to protect employees of state-legal cannabis businesses attempting to obtain residential mortgages funded by federal programs.
Financial institutions would not be required to offer banking services to cannabis companies, but the bill discourages banks and credit unions from denying such services based on “personal beliefs or political motivations.” The measure also directs the U.S. Treasury’s Financial Crimes Enforcement Network to amend previous guidance on cannabis banking services within six months and for “depository institutions” to comply with the agency’s new regulations.
Cannabis Industry Insiders React
Brady Cobb, a Capitol Hill lobbyist and the CEO of Sunburn Cannabis, said that next week’s Senate Financial Services Committee hearing on the legislation “marks another historic milestone in the cannabis reform movement’s fight to end the failed decades-long war on the cannabis plant.” Noting that Senate approval of a cannabis banking bill has been “elusive,” he says that the upcoming hearing signals the will of Senate leadership to advance the newly revised legislation.
“The provisions of section 5 of the revised bill bode well for broader access for the cannabis industry to financial services in the U.S., and the provisions of section 10 appear to obviate concerns raised when the bill was last in the limelight in July of this year,” Cobb writes in an email. “If passed from the committee, it also appears as if there is sufficient bipartisan support to pass it on the Senate floor. As someone who has lobbied for this bill for close to ten years and favored a path of incremental policy wins, I cannot underscore how significant this moment is for the movement and the industry as a whole.”
But support for the new SAFER Banking Act among cannabis industry insiders is not universal. Sundie Seefried, CEO of Colorado-based Safe Harbor Financial, a company that offers banking services to cannabis businesses, said that the Bank Secrecy Act is unchanged by the bill and will continue to be an obstacle.
“Unless Bank Secrecy regulations are substantially changed, the fact remains that the cannabis industry is both cash intensive and, at the same time, continuing to fight an active, illicit market operating in plain sight,” Seefried told MJBizDaily.
The SAFER Banking Act is also co-sponsored by Republicans Sen. Kevin Cramer of North Dakota and Sen. Dan Sullivan of Alaska, as well as New Jersey Democrats Sen. Cory Booker and Sen. Bob Menendez. A section-by-section summary of the revised legislation is available online.