Senate Banking Committee Schedules Vote on SAFE Banking Act

On September 27, the Senate Committee on Banking, Housing, and Urban Affairs is set to hold a vote on the Secure and Fair Enforcement (SAFE) Banking Act, which would make it easier for financial institutions to serve legal cannabis businesses. Some form of cannabis use is legal in 40 U.S. states, but because it remains illegal at the federal level, many banks are unwilling to serve the industry.

Senator Sherrod Brown (D-Ohio), Chair of the Senate Banking Committee, said that the legislation “will ensure that small businesses in the cannabis industry can access banking and other financial services, and keep their workers safe. I look forward to passing this legislation with a bipartisan majority and bringing it to the Senate floor.”

The bill was first introduced a decade ago by Senators Jeff Merkley (D-Ore.) and Steve Daines (R-Mont.), and has passed seven times in the House but hasn’t passed in the Senate. According to Banking Dive, Daines said that he is “cautiously optimistic” about the legislation, and thinks it has “enough votes to get it passed.”

Supporters of the bill say that it would help legal businesses avoid the inconvenience and safety risks of using cash exclusively, without impacting the legal status of cannabis passed states where it’s legal. However, Section 10 of the bill has garnered opposition from lawmakers as it addresses requirements for deposit account termination orders and requests. 

Senator Jack Reed (D-R.I.) said the language of Section 10 should only address cannabis-related businesses, so as not to crack down on other politically controversial industries. The Hill noted that Republicans have opposed this section too, in concerns that it would also target gun manufacturers and payday lenders. 

However, since the SAFE Banking Act is a banking bill, and not a cannabis bill, many think it will be more palatable in the Senate. “Because it deals specifically with the financial institutions, rather than the cannabis businesses, it feels—for lack of a good word—safe for a lot of these members,” said David Mangone, director of policy at The Liaison Group, a federal cannabis advocacy firm.