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House Financial Services Committee Passes SAFE Banking Act
Legislation helps align state and federal laws on the issue of cannabis banking and reduces public safety risk for communities
Washington, D.C.-, March 28, 2019
Tags: Jobs & the Economy
Washington, D.C. – Today, the House Financial Services Committee voted 45 to 15 to pass H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019. Authored by U.S. Reps. Ed Perlmutter (D-CO-07) and Denny Heck (D-WA-10) and cosponsored by Reps. Warren Davidson (R-OH-08) and Steve Stivers (R-OH-15). The bill allows marijuana-related businesses in states with existing regulatory structures to access the banking system.
Today, voters in 47 states plus the District of Columbia - 97.7 percent of the population – have legalized some form of adult recreational and medical marijuana, including cannabidiol. Today’s vote marks a significant milestone considering Congress has failed to act on this issue since similar legislation was first introduced in 2013.
Cannabis is currently considered illegal under the federal Controlled Substances Act therefore financial institutions providing banking services to legitimate and licensed marijuana businesses are subject to criminal prosecution. Since state and federal law are not aligned on the issue, legal and legitimate businesses are forced to operate on a cash-only basis creating a serious public safety risk for employees, businesses and communities, as well as providing an opportunity for tax evasion, money laundering and other white-collar crimes. The SAFE Banking Act is seen as the first of many cannabis reform measures.
With 152 cosponsors at the time of the committee vote – over a third of the entire House – the bill will next move to the floor of the House. A Senate companion bill is also expected to be introduced in the coming weeks. The bill’s sponsors applauded the committee vote and reiterated the need to continue to advance the legislation.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs. These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions. Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer,” said Perlmutter. “While Congress has stuck its head in the sand for many years, this Committee has shown leadership on this issue and I want to thank my cosponsors and members of the Committee for their support.”
“With this vote, the Financial Services Committee took a stand for public safety and transparency. The SAFE Banking Act will enhance public safety by giving those operating legitimate marijuana establishments access to banking services available to other industries,” said Heck. “These businesses will no longer need to deal exclusively in cash. The SAFE Banking Act will help ensure the fair treatment of those who work for or do business with a legitimate marijuana business. Finally, the SAFE Banking Act will make the marijuana industry more transparent and accountable by ensuring compliance with current regulations and norms.”
“Today’s markup allowed for input from both sides of the aisle that ultimately made the SAFE Banking Act a stronger bill, including my amendment to give safe harbor to insurers, and I look forward to working with Representative Perlmutter to continue improving it as it moves through the legislative process,” Stivers said. “This isn’t a bill about condoning marijuana use, it’s about ensuring businesses are not forced to operate in cash and open themselves up to risk, and I believe the improvements made today reflect that goal. Again, I want to thank Mr. Perlmutter, as well as Mr. Heck and Mr. Davidson for their leadership on this issue.”
“Government regulators have deemed cannabis business owners to have certain reputational risks. From a civil liberties standpoint, we need to move away from this. Allowing these businesses access to the safety of our American financial institutions minimizes risk for owners and enhances our national security. I thank my colleagues for their work on this critical legislation,” said Davidson.
A draft version of the SAFE Banking Act was discussed during the first-ever congressional hearing about cannabis banking on February 13, 2019. Compared to previous iterations of the bill, the SAFE Banking Act of 2019 adds protection for ancillary businesses like real estate owners, accountants, and other vendors from money laundering and other laws as well as adjusts the tribal language and the definition of “cannabis-related legitimate business.” The final version of H.R. 1595 voted on in Committee also includes two provisions aimed at expanding access to financial services for minority-owned and women-owned cannabis-related businesses.
H.R. 1595 has the support of the American Bankers Association, Credit Union National Association, Independent Community Bankers of America, the Electronic Transactions Association, the National Cannabis Industry Association, Mid-Size Bank Coalition of America, The Real Estate Roundtable, and various U.S. trade associations such as American Land Title and American Property Casualty Insurance Association, among others.