The bill offers a narrow fix for one of the cannabis industry’s biggest hurdles: access to banking. It does not address other areas of cannabis law reform, like expungement or equity.
Colorado Rep. Earl Perlmutter reintroduced the SAFE Banking Act on Thursday in the U.S. House of Representatives. The Senate is expected to follow next week.
Perlmutter and the other House sponsors will hold a press conference Friday morning about the legislation.
The SAFE Banking Act of 2021 would provide clarity and safe harbor for financial institutions that want to work directly with cannabis-related businesses. The House first passed the SAFE Banking Act in an historic vote in 2019, but the bill later stalled in the then-GOP-controlled Senate. Democrats have narrow control of both chambers and the presidency, but that doesn’t necessarily mean that the SAFE Banking Act is a slam dunk. Further, the Act might not garner support from advocates who argue that cannabis banking reform should not pass without, or before, justice-focused efforts that seek to undo harms caused by prohibition.
The SAFE Banking Act would largely lift one of the biggest hurdles for the cannabis industry: access to banking services. Because cannabis remains federally illegal despite dozens of states passing medical cannabis laws, and 15 states and Washington, D.C. passing adult use cannabis legalization, banks remain hesitant to serve cannabis businesses, generally citing concerns over Federal Deposit Insurance Corporation compliance.
“Making the SAFE Banking Act the law of the land would mean thousands of cannabis businesses and their employees across the country would finally be able to gain full, legal access to the banking system, allowing them to be treated like any other legitimate business and greatly reducing the public safety risk in our communities,” Perlmutter told Cannabis Wire. “There is growing momentum for cannabis reform and the SAFE Banking Act is the first of many cannabis reforms Congress needs to address.”
On Wednesday, the American Bankers Association sent a letter to Representatives Ed Perlmutter, Steve Stivers, Nydia M. Velazquez, and Warren Davidson, outlining that while the ABA doesn’t take a position on adult use cannabis legalization, it does “support” the SAFE Banking Act and “urges the House Financial Services Committee to approve this legislation and for the full House of Representatives to quickly consider this important measure.”
“Our member banks find themselves in a difficult situation due to the conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law prohibiting it. Congress must act to resolve this conflict between state and federal law,” the letter noted. “The SAFE Banking Act is not a cure all for the cannabis banking challenge, but it is a measure that helps clarify many issues for the banking industry and regulators.”
Major financial institutions and entities, including Wells Fargo, HSBC North America, the American Family Mutual Insurance Company, M&T Bank Corporation, and PayPal have lobbied on the SAFE Banking Act, as Cannabis Wire has reported, along with cannabis giants like Canopy Growth, Surterra Holdings (now Parallel), Curaleaf Inc., and PAX Labs. Cannabis Wire has also covered the myriad cities and towns that have lobbied on the SAFE Banking Act, from the cities of Sacramento and Oakland to the Office of the Governor, State of Colorado and the State of Nevada.
“We have business owners coming to City Hall to make deposits, sometimes carrying large sums of cash,” Javier Trujillo, the director of government and public affairs for the City of Henderson, Nevada, which also lobbied on the SAFE Banking Act, told Cannabis Wire in 2019. “It could be in the tens of thousands, if not more sometimes, and they do it twice a year,” at tax time.
Interestingly, as Cannabis Wire has reported, the National Rifle Association and National Fraternal Order of Police have also lobbied on the issue.
Groups like the Drug Policy Alliance and the American Civil Liberties Union argued in 2019 that the SAFE Act doesn’t do enough to repair the harms caused by the enforcement of cannabis laws, which disproportionately affect people of color. In a letter addressed to House leadership, those groups, along with a handful of others, shared concerns that the bill’s passage “will undermine broader and more inclusive efforts to reform our country’s marijuana laws,” and that the bill “would benefit the marijuana industry, not communities who have felt the brunt of prohibition.”
Today, DPA’s position remains unchanged.
“We support comprehensive marijuana reform. Any marijuana bill that moves in Congress must include descheduling and social justice, including the expungement and resentencing of marijuana convictions,” Maritza Perez, Director of the Office of National Affairs at DPA, told Cannabis Wire.
Editor’s note: This story, originally published on March 17 under the headline “Cannabis Banking Bill Will Be Reintroduced in Congress This Week” has been updated to reflect the bill’s introduction.