The American Bankers Association (ABA) sent a letter to congressional leadership voicing “strong support” for the Secure and Fair Enforcement (SAFE) Banking Act just days before the Senate Banking Committee is scheduled to discuss the issue at a marijuana-focused hearing.
The ABA stated that this “important legislation would help bring certainty to an important issue that has become a challenge for so many of our nation’s communities and the banks that serve them.”
“The SAFE Banking Act is an urgently needed, and widely supported, bipartisan solution that will allow banks to handle not only the proceeds from both state-licensed cannabis businesses and the ancillary businesses—accountants, skilled trades, landlords, law firms, and other service providers—those businesses rely upon to operate, but also accept deposits from and make loans to employees of those businesses,” the letter says.
While the measure has passed the House several times in recent sessions, it’s repeatedly stalled in the Senate under both Democratic and Republican control. This time, however, the Senate is taking the lead, starting with Thursday’s Banking Committee hearing.
“Federal law currently prevents banks from banking cannabis businesses and these ancillary businesses, without fear of federal sanctions,” ABA said. “As a result, this industry is operating primarily in cash, which is not only a public safety risk, but also undermines the ability for regulators, tax collectors, and law enforcement to monitor the industry effectively.”
The association said that it does not take a position on federal cannabis legalization but that its “member banks find themselves in conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law prohibiting it.”
ABA has consistently advocated for the SAFE Banking Act—with letters to Congress, polling that shows public support for the financial reform and events where lawmakers have promoted the legislation.
“The bipartisan, bicameral, SAFE Banking Act would provide that legal and regulatory clarity for banks and help facilitate access to financial services for state-sanctioned cannabis businesses while strengthening the ability of financial institutions and law enforcement to detect unlawful activity,” it said in the latest letter. “This legislation has garnered strong bipartisan support in both the House and Senate, and ABA urges all Members of Congress to please join in cosponsoring the SAFE Banking Act. ABA also requests swift consideration of these bills in both the Senate Banking and House Financial Services Committees, through regular order, and further advocates for swift passage by Congress.”
Senate Majority Leader Chuck Schumer (D-NY) has said that he intends to bring the bill to the floor after it clears committee and then amending it to incorporate equity provisions such as expungements for prior marijuana convictions. He called the broader effort to repair the harms of the drug war a “moral responsibility” for Congress. Prior to the scheduling of the marijuana hearing in the Senate Banking Committee, Chairman Sherrod Brown (D-OH) told reporters that senators planned to “move quickly” on the legislation from Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT). Senators on both sides of the aisle have been pushing for urgent action on the standalone measure.
The SAFE Banking Act would protect banks that work with state-legal cannabis businesses from being penalized by federal regulators. The latest version has already been amended in several ways that have encouraged advocates. The bill is considered one of the more passable pieces of cannabis legislation this session with Republicans in control of the House. A vote in the Senate last month on separate marijuana legislation, however, has raised some questions about whether any modest cannabis reform is achievable under the current congressional makeup. Senate Republicans blocked a procedural motion to advance a bipartisan bill to simply require studies into the medical potential of cannabis for military veterans with chronic pain and PTSD.
Last month, Schumer said that he was “disappointed” that the so-called SAFE Plus package of marijuana banking and expungements legislation he worked on last year didn’t advance, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done. The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
For his part, Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is sponsoring the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
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