By Jeff Williams
The measure would clear the way for marijuana-related businesses to access the banking system, while also addressing safety risks raised by all-cash operations.
The Independent Community Bankers of America (ICBA) sent a letter to House Speaker Nancy Pelosi (D-Calif) and House Republican Leader Kevin McCarthy (R-Calif) expressing "strong support" for the Secure and Fair Enforcement (SAFE) Banking Act of 2021 (H.R. 1996). The bill, scheduled to go to the House floor for a vote, would establish a safe harbor from federal sanctions for financial institutions that provide banking services to cannabis-related businesses (CRBs) in states and other jurisdictions that have legalized cannabis usage.
"As more states legalize cannabis for medical and/or recreational use, it is critically important that cannabis-related businesses have access to services provided by the traditional banking system," the ICBA said. The bill was reintroduced last month by Reps. Ed Perlmutter (D-Colo), Nydia M. Velazquez (D-NY), Steve Stivers (R-Ohio), and Warren Davidson (R-Ohio), and co-sponsored by more than 100 representatives (see Banking and Finance Law Daily, March 19, 2021). A companion version of the bill was introduced in the Senate by Sens. Jeff Merkley (D-Ore) and Steve Daines (R-Mont) and has 30 co-sponsors.
While 47 states, four U.S. territories, and the District of Columbia have legalized some form of recreational or medical marijuana usage, current law prohibits CRBs from accessing banking services and products. That has resulted in CRBs having to conduct business mostly in cash, which proponents of the legislation say has created a serious safety risk that invites theft, robberies, burglaries, and other crimes.
"The current conflict between state and federal law with regard to cannabis has created increasingly significant legal and compliance concerns for banks that wish to provide banking services to CRBs in jurisdictions where cannabis is legal. Legal and regulatory uncertainty has curtailed access to the traditional banking system for CRBs and forced them to operate mostly in cash," the ICBA said. "Cash-only businesses, especially those with a high volume of revenue, pose a significant risk to public safety."
The measure would provide protections from money laundering laws for any proceeds derived from legal marijuana businesses, as well as for hemp and hemp-related CBD-related businesses. The bill would also provide safe harbor to banks that provide products and services for businesses such as landlords, accountants, utilities providers, and others that may be paid from funds derived from cannabis sales, ICBA noted. "These ancillary businesses may be difficult to identify in states that have legalized cannabis, and potentially create a legal and regulatory challenge for even those banks that choose not to serve CRBs directly," the ICBA said.
Companies: Independent Community Bankers of America
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