U.S. SENATE—U.S. Senator Steve Daines today introduced a bipartisan bill, the “Secure and Fair Enforcement (SAFE) Banking Act,” to ensure that legal cannabis businesses have access to banks, credit unions and other financial institutions. Today, many legal cannabis businesses must conduct all of their business entirely in cash.
“Montana businesses shouldn’t have to operate in all cash—they should have a safe way to conduct business,” Daines said. “My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment. This in turn will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”
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Most state legal medicinal or recreational cannabis businesses are denied access to the banking system because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. The lack of access to bank accounts, credit cards, and checks have forced state legal cannabis businesses to operate in cash, opening the door to tax evasion and to a dangerous pattern of robberies.
To address the safety concerns resulting from these state legal businesses being shut out of banking services, 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 a 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. Hemp and hemp-derived CBD related businesses are covered under this proposal as well.
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.
Initiative 190, legalizing recreational marijuana, was passed by Montana voters last fall. The Montana legislature recently released a draft bill to codify the initiative in law.
Senator Daines introduced this bipartisan legislation with Senator Jeffrey Merkley (D-Ore.) and Senators Kevin Cramer (R-N.D.), Daniel Sullivan (R-Alaska), Rand Paul (R-Ky.), William Cassidy (La.), Cynthia Lummis (R-Wyo.), Robert Menendez (D-N.J.), Kyrsten Sinema (D-Ariz.), Edward Markey (D-Mass.), Alejandro Padilla (D-Calif.), Patrick Leahy (D-Vt.), Richard Durbin (D-Ill.), Ronald Wyden (D-Ore.), Mazie Hirono (D-Hawaii), Christine Smith (D-Minn.), Angus King (R.I.), Catherine Cortez Masto (Nev.), Michael Bennet (D-Colo.), Jon Tester (D-Mont.), Jacklyn Rosen (D-Nev.), Kristin Gillibrand (D-N.Y.), Elizabeth Warren (D-Mass.), Christopher Murphy (D-Conn.), Gary Peters (D-Mich.), Bernard Sanders (D-Vt.), Brian Schatz (D-Hawaii), Patricia Murray (D-Wash.) and Amy Klobuchar (D-Minn.) joined as cosponsors.
Last week, the bipartisan bill was introduced in the U.S. House of Representatives.
Daines received statements of support from several stakeholders:
“Montana’s banks need certainty as to banking cannabis-related legal businesses (CRLBs)…To this end, MIB is very pleased to learn that you are supporting the SAFE Banking Act. Montana’s community banks recognize the need for a legal and regulatory safe harbor so that they may lawfully serve CRLB’s and their service providers. And, the SAFE Act provides the protection and guidance needed for MIB’s member banks to do just that.” – Letter from James Brown, Executive Director, Montana Independent Bankers
“Senator Daines–thank you for sponsoring the SAFE Banking Act. This important legislation will ensure that our family business can have safe access to banking & insurance in Montana. Being able to pay our employees’ wages, taxes, and suppliers with checks and merchant cards is a much safer solution than having large sums of cash on hand. This issue creates a security risk for all in the industry. This federal change in legislation will help improve safety for every cannabis business in states that have legal or medicinal cannabis. Thank you for keeping my family safe.” – Justin Oberlender, Operations Director, MonCannabis Farms, LLC
“We are pleased that Senator Daines is leading the charge to develop the regulatory framework that will provide financial services to legal cannabis-related businesses. And while the SAFE Act creates the structure to serve business interests; even more importantly, it will create a vital safety net for the employees by providing a secure place for cash and payroll deposits.” – Tracie Kenyon, President and CEO, Montana Credit Unions