Federal Legislation to Aid Cannabis Bankers Advances

by Sean F. Dalton, Esq.

With 33 states having legalized either medical or adult use marijuana, federal legislators are now considering legislation to ease the current regulatory constraints placed upon banks to provide services to marijuana related businesses throughout the United States.

On March 28th, the House Financial Services Committee approved the Secure and Fair Enforcement (SAFE) Banking Act which affords financial institutions clear legal guidance in this billion dollar industry.  The bill, with 152 co-sponsors was approved 45-15 with bipartisan support and was referred to the House Judiciary Committee for further consideration.

Many legislators who voted in support of the bill felt it would improve public safety by allowing marijuana related businesses to utilize banking services and lessen the risk of armed robberies of large sums of cash. Marijuana remains illegal under federal law despite a recent poll showing 61 percent of Americans approve of legalization.[1]

The SAFE Act prohibits federal banking regulators from terminating or limiting the deposit insurance or taking any adverse action against a depository institution under the Federal Deposit Insurance Act solely because the depository institution provides or has provided financial services to a cannabis-related legitimate business or service provider.

The SAFE  Act also provides protection for ancillary businesses that operate in the cannabis sector in the United States, which means that companies that operate legitimate ancillary cannabis-related businesses including packaging, supply chain services, accessories, equipment, lightings, and grow systems would also be able to access the services of financial institutions along with professional services related to the providing of these services.

The bill requires financial institutions operating in this sector to continue following guidance provided by the Financial Crimes Enforcement Network (FinCEN) within the Department of Treasury.

It is expected that a companion bill will be introduced in the Senate in the coming weeks.

[1] General Social Survey, NORC at the University of Chicago, 2018.

 

Date Published: April 3, 2019


Written by: Sean Dalton, Esquire