SAFE Banking Act Hearing Could Happen in August
Prior to the end of July 2019, a hearing on bipartisan marijuana banking legislation could be heard by a senate committee.
This marks a shift after Senate Banking Committee Chairman Mike Crapo said in April that he would not commit to the hearing, claiming that it would be too difficult to resolve for as long as cannabis remained illegal under federal law. The chair of a key U.S. Senate committee, earlier this year, declined to commit to considering legislation that would provide federal protection to financial institutions serving state marijuana businesses.
Because many states have legalized cannabis, there are significant problems when it comes to banking and ensuring sufficient accountability.
In May 2017, Senator Jeff Merkley introduced to congress: The Secure And Fair Enforcement (SAFE) Banking Act. The bill aims to impact the ability of federal banking regulators to intervene while dealing with a legal cannabis company. Specifically, the Act would stop regulators barring or limiting financial services from offering financial help to cannabis companies. Additionally, it will stop federal regulators from punishing financial institutions for providing services to cannabis companies, owners and employees.
This topic was highlighted further on our April 22nd article. While the Safe Banking Act was not expected to pass in a previous session, it laid the groundwork for this upcoming vote. Learn more about our previous points on how the “Safe Banking Act Will Most Likely Pass”.
The Act is designed to bridge the gap between legal companies in certain states and the current non-legal status of marijuana on a federal level. A company who conducts legitimate operations in a state with legalized marijuana laws may still face problems interacting with financial institutions. This may make it difficult for these legal companies to seek out loans, purchase insurances and grow their business.
This Act did not receive a full vote in either chamber Of Congress when first introduced in May 2017, but the re-introduced bill has been altered slightly. The revision adds protection for ancillary businesses that provide services or products for legal cannabis-related businesses.
The Secure and Fair Enforcement (SAFE) Banking Act was approved in March 2019 by the House Financial Services, and advocates are anticipating a full House vote. Key lawmakers have been talking for months about placing this legislation on the calendar for a full House vote. As nothing has been scheduled before the August recess, this indicates that floor consideration is more likely to occur in the fall.
At the start of July, on Capitol Hill, a group of experts testified in favor of changing federal laws. These laws were to allow for marijuana to be used and sold legally. According to Fox Business, “It was largely embraced on both sides of the aisle”. They argued that “the state-based cannabis industry is a large driver of economic growth and tax revenue across the country”. The federal law has made it difficult for people making their living through legal marijuana sales, causing tensions for the 200,000 employees who live in fear of federal prosecution. They also argued that federal law stops workers from getting mortgages and car loans, while business owners pay a tax rate higher than 70%.
Advocates of the bill have recently pursued two new strategies: amending the pending standalone legislations to encourage GOP approval, and supporting a separate rider on the issue. Many lawmakers have recently focused on the bipartisan standalone bill, which provides safeguards for banks that service marijuana businesses in states where it’s legal.
Momentum behind this bill is gaining force, it cleared the House Financial Services Committee in March, and it currently has 191 cosponsors, including 23 Republicans, with a floor vote expected within the next several weeks. Proponents of the SAFE Act include a coalition of 20 bipartisan governors, the National Association of State Treasurers, 50 state banking associations, a selection of powerful financial regulators across 25 American states and a majority of the state attorney generals.
While Congress tries to resolve the ongoing financial insecurities for cannabis businesses, it will still not affect the legal status of marijuana under federal law. It is however, one of the first incremental steps Congress can take.