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, opening them up to theft, tax evasion and organized crime.
“Montanans should be able to conduct their small business without fearing for their safety,” Daines said. “Our bipartisan bill would provide the security and peace of mind that legal Montana cannabis businesses need to freely use banks, credit unions and other financial products without a fear of punishment. This bill will help keep our Montana communities safe, keep crime off the streets, support Montana law enforcement and small businesses and bolster local economies.”
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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.
In the Senate, this legislation is cosponsored by U.S. Senators Bill Cassidy (R-La.), Cynthia Lummis (R-Wyo.), Lisa Murkowski (R-Alaska), Kevin Cramer (R-N.D.), Dan Sullivan (R-Alaska), Jacky Rosen (D-Nev.), Kirsten Gillibrand (D-N.Y.), Brian Schatz (D-Hawaii), Edward J. Markey (D-Mass.), Ben Ray Luján (D-N.M.), Catherine Cortez Masto (D-Nev.), Angus King (I-Maine), Tammy Duckworth (D-Ill.), John Fetterman (D-Penn.), Ron Wyden (D-Ore.), Kyrsten Sinema (I-Ariz.), Alex Padilla (D-Calif.), Dick Durbin (D-Ill.), Peter Welch (D-Vt.), Mark Kelly (D-Ariz.), Michael Bennet (D-Colo.), Patty Murray (D-Wash.), Tina Smith (D-Minn.), Amy Klobuchar (D-Minn.), Elizabeth Warren (D-Mass.), Tim Kaine (D-Va.), Debbie Stabenow (D-Mich.), Bernie Sanders (I-Vt.), Bob Menendez (D-N.J.), Chris Coons (D-Del.), John Tester (D-Mont.), Mark Warner (D-Va.) and Martin Heinrich (D-N.M.).
Daines and Merkley also issued the issued the following statement following the introduction of the bipartisan, bicameral Secure and Fair Enforcement (SAFE) Banking Act of 2023:
“The introduction of the ‘SAFE Banking Act’ puts us on a path to move through the Senate Banking Committee and get a vote on the floor of the Senate. As introduced, our ‘SAFE Banking Act of 2023’ only includes aspects of that package within the jurisdiction of the Banking Committee.
“We expect ‘SAFE Banking’ to go through the Banking Committee and on the floor there will be an opportunity to add additional regular-order passed provisions – such as the ‘HOPE’ and ‘GRAM Acts’ – before final Senate passage. This expanded ‘SAFE Banking Plus’ package will represent the largest-ever cannabis reform legislation with bipartisan support in Congress. We are committed to making 2023 the year a bill is signed into law that ensures all legal cannabis businesses have access to the financial services they need.”
The “Harnessing Opportunity by Pursuing Expungement (HOPE) Act” would support states with grants that want to expunge cannabis records, and the “Gun Rights and Marijuana (GRAM) Act” would allow state-legal cannabis users to purchase and possess firearms.
Daines received statements of support from several stakeholders:
“We greatly appreciate Sen. Daines’ leadership on the SAFE Banking Act. The huge disconnect between federal and state laws surrounding cannabis make it extremely difficult for legitimate Montana businesses to conduct normal, day-to-day transactions if they don’t have access to a typical bank account. The SAFE Banking Act provides predictable sideboards that will allow community banks to maintain accounts with legal cannabis businesses. This is much needed and long-awaited legislation and banks throughout Montana are anxious for it to become law.” – Cary Hegreberg, President and CEO of Montana Bankers Association
“We are pleased to have Senator Daines spearhead efforts to develop the regulatory framework that will provide financial services to legal cannabis-related businesses. The SAFE Act not only provides a way for these businesses to conduct transactions, but also provides a vital safety net for employees by providing a secure place for cash and payroll deposits.” – Tracie Kenyon, President and CEO of Montana’s Credit Unions
“While the member banks of the Montana Independent Bankers Association recognize the sensitive nature of the bill, we see first hand that consumers and small businesses alike are the ones suffering by the government not providing a clear and safe environment for financial institutions to serve cannabis consumers. It has created a market condition that increases the number of citizens that are unbankable rather than moving them into a safe, bank monitored system. This unbankable issue is only growing as states across the U.S., including, Montana, legalize recreational use of marijuana. Therefore, Montana’s community banks support the Safe Banking Act and thanks Senator Daines for his leadership on this issue.” – Tim Schreiber, President of the Montana Independent Bankers Association