Banking associations representing all 50 U.S. states—as well as various other financial, insurance and union organizations—are calling for Senate committee passage of a marijuana banking bill “as quickly as possible.”
Ahead of a Senate Banking Committee hearing on cannabis industry financial issues that was held on Thursday, several national and state associations sent letters to the panel’s leadership, urging quick action to advance the Secure and Fair Enforcement (SAFE) Banking Act to the floor.
The American Bankers Association (ABA) and all 50 of its state affiliates said that the committee should schedule a markup “as soon as possible.”
Other groups that have advocated for the legislation’s expedient enactment include: Independent Community Bankers of America (ICBA), Electronic Transactions Association (ETA), International Brotherhood of Teamsters and a coalition of insurance industry trade groups.
“The SAFE Banking Act is an urgently needed, and widely supported, bipartisan legislative solution to allow banks to handle the proceeds from state-licensed cannabis businesses and the accountants, skilled trades, landlords, law firms, and other service providers they rely upon for legal operations,” the bankers’ letter says.
“Federal law prevents banks from banking cannabis businesses, as well as these ancillary businesses, without fear of federal sanctions,” it continues. “As a result, this industry is operating primarily in cash, which causes significant public safety concerns and undermines the ability of cannabis regulators, tax collectors, law enforcement and national security organizations to monitor the industry effectively.”
Members of the Banking Committee discussed many of these challenges during Thursday’s hearing, which also involved testimony from the SAFE Banking Act sponsors, Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), as well as a reform advocate, cannabis financial services professional, union leader and legalization opponent.
“The SAFE Banking Act is a narrowly tailored solution designed to bring this growing industry into the regulated banking system and provide much-needed visibility into its financial activity,” the banking associations said.
“Financial institutions adhere to stringent anti-money laundering and counter-terrorist financing reporting requirements, as well as monitor accounts for suspicious activity. The increased transparency that would come from processing transactions through bank accounts instead of in cash would ensure that regulators and law enforcement have the necessary tools to identify bad actors and remove them from the marketplace. The legislation would also enhance tax collection in the states where cannabis is now legal.”
“The inability of the state-licensed cannabis industry to access safe and regulated financial services is a pressing concern for so many of our nation’s communities and the banks that serve them,” the letter says. “With state-licensed cannabis businesses currently authorized in 38 states and more states weighing legalization, we urge you to address these critical issues by marking up and advancing the SAFE Banking Act as quickly as possible.”
The national ABA separately sent a letter to congressional leadership this week, calling for “swift passage” of the SAFE Banking Act.
Another banking association, ICBA, said in a letter to the Senate SAFE Banking Act sponsors on Tuesday that the legislation would “resolve a conflict between state and federal law and address a critical public safety concern.”
“S. 1323 is essential for the ongoing ability of community banks to effectively serve their communities,” the group said. “It would also alleviate the significant threat to public safety posed by cash intensive [cannabis-related businesses], effectively being shut out of the banking industry.”
The general president of the Teamsters union, which represents “many” members who work in the marijuana industry, said in another letter that the banking bill would “drastically improve workplace safety conditions by allowing banks and other financial institutions to provide services to legitimate cannabis-related businesses.”
“As Congress works to establish the necessary guardrails around cannabis legalization, the labor and safety interests of workers in this industry must be considered paramount,” Teamsters’s Sean O’Brien said. “Passing SAFE Banking is a necessary part of this process and will improve worker safety conditions while also easing operational burdens for employers at the same time.”
Nine different insurance trade associations said in a joint letter that their industry “is potentially exposed to liability arising from the differences of the legal treatment of marijuana and marijuana products under federal and state law and regulation at the state level.”
The groups—the American Land Title Association, American Council of Life Insurers, American Property Casualty Insurance Association, The Council of Insurance Agents & Brokers, Independent Insurance Agents & Brokers of America, National Association of Mutual Insurance Companies, National Association of Professional Insurance Agents, Reinsurance Association of America and Wholesale & Specialty Insurance Association—recommended that the SAFE Banking Act be amended to include provisions from another recently refiled bill to extend protections to insurance companies that work with cannabis businesses.
Banking Committee Chairman Sherrod Brown (D-OH) said recently that senators planned to “move quickly” on the SAFE Banking Act, and so far that’s exactly what’s happening. The announced scheduling of the hearing came just about a week after it was reintroduced in both chambers.
Senators on both sides of the aisle have been pushing for urgent action on the standalone legislation, which would protect banks that work with state-legal cannabis businesses from being penalized by federal regulators.
Senate Majority Leader Chuck Schumer (D-NY) said at a cannabis rally in New York City on Saturday that he would bring the bill to the floor after it clears committee, and he emphasized that it would be revised to include expungements provisions. Addressing the harms of the drug war is a “moral responsibility” for Congress, he also said recently.
Schumer, Senate Finance Committee Chairman Ron Wyden (D-OH) and Sen. Cory Booker (D-NJ) also released a joint statement following Thursday’s hearing that specifically talked about plans to incorporate cannabis expungements language from a bipartisan bill that was refiled last month.
The SAFE Banking Act is considered one of the more passable pieces of cannabis legislation this session with Republicans in control of the House. A former top aide to Schumer recently wrote an op-ed for Marijuana Moment explaining how the new political dynamics could actually bolster the bill’s prospects of passage this year.
A vote in the Senate last month on separate marijuana legislation, however, has raised some questions about whether any modest cannabis reform is achievable under the current congressional makeup. Senate Republicans blocked a procedural motion to advance a bipartisan bill to simply require studies into the medical potential of cannabis for military veterans with chronic pain and PTSD.
The standalone SAFE Banking Act has been approved along largely bipartisan lines in the House in some form several times in recent years. But it’s consistently stalled out in the Senate under both Democratic and Republican leadership.
Last month, Schumer said that he was “disappointed” that the so-called SAFE Plus package of marijuana banking and expungements legislation he worked on last year didn’t advance, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.
The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
For his part, Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is sponsoring the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
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Numerous cannabis bills have been filed in Congress in recent weeks beside the banking legislation.
For example, bipartisan congressional lawmakers recently filed a bill to mandate the automatic sealing of criminal records for certain non-violent federal marijuana convictions.
Rep. Brian Mast (R-FL) introduced legislation last month to protect the Second Amendment rights of people who use marijuana in legal states, allowing them to purchase and possess firearms that they’re currently prohibited from having under federal law.
Also last month, Joyce and House Minority Leader Hakeem Jeffries (D-NY) filed a measure designed to prepare the federal government for marijuana legalization, directing the attorney general to form a commission to study and make recommendations about regulating cannabis in a way similar to alcohol.