Bank supervisors urge Congress to pass SAFE Banking bill for cannabis businesses
The Conference of State Bank Supervisors (CSBS) is urging Congress to keep the Secure and Fair Enforcement (SAFE) Banking Act in the final version of the America COMPETES Act to provide legal marijuana businesses with access to financial services.
“By granting a safe harbor for financial institutions, Congress can bring regulatory clarity to the financial services industry, address public safety concerns, and ensure access to financial services for state-compliant marijuana and marijuana-related businesses,” James Cooper, acting president and CEO of the CSBS, wrote to House and Senate leaders.
“Safe harbor should be extended to all financial services, including money transmission, as the adverse impact of the current inconsistency in state and federal law is not limited to depository institutions.”
While marijuana is legal in 37 states and the District of Columbia for medical purposes and 18 states and the District of Columbia for recreational use, these businesses are blocked by federal law from accessing financial services such as bank deposits, loans, money transmission, and accepting credit cards for payment, Cooper said. This leaves legal marijuana businesses operating largely as cash-only operations, which has led to increased crime as criminals know these businesses keep large quantities of cash on hand.
“Passage of the bi-partisan SAFE Banking Act would reduce the risk associated with large cash-and-carry operations and increase public safety. Enacting the SAFE Banking Act would also support economic development in states that have legalized cannabis while enhancing safety for industry employees and the public alike. Tax collection, consumers, and the financial system will remain at risk until financial institutions can serve the industry without concern of violating federal law,” Cooper added in his letter.
CSBS is the national organization of bank regulators from all 50 states, American Samoa, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.
