Cannabis banking bill SAFER Act heads to Senate committee next week
Senate Considers SAFER Banking Act for Cannabis Businesses' Access to Financial Services.
State-sanctioned cannabis businesses would be able to access banks and credit unions under the latest version of a bill Senate Majority Leader Chuck Schumer, D-N.Y., said he would bring to the Senate floor “with all due speed.”
If passed, the Secure and Fair Enforcement Regulation Banking Act would allow cannabis operations to make deposits and access insurance and other financial services — activities that are currently illegal under federal law, despite 47 states legalizing some form of medical or recreational cannabis.
Cannabis is still classified as an illegal drug under the Controlled Substances Act, creating a disconnect between state-sanctioned cannabis businesses and federal laws. Despite operating legally under state laws, cannabis businesses are blocked from accessing deposit accounts, securing lines of credit, taking out mortgages or accepting credit and debit cards as payment.
The SAFER Banking Act would provide protection for banks, credit unions and other types of financial institutions that do business with state-sanctioned cannabis operations, helping to shift them from cash-only transactions that make them targets for crime and jeopardize public safety.
Under the bill, banks and other financial institutions would not be penalized for providing banking services to state-approved cannabis businesses. The SAFER Banking Act also calls for having processes and procedures in place to identify fraudulent or illegal activity.
"This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans," Schumer, alongside Sens. Jeff Merkley, D-Ore., Steve Daines, R-Mont., Kyrsten Sinema, I-Ariz., and Cynthia Lummis, R-Wyo., said in a statement. "It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk."
The U.S. Senate Committee on Banking, Housing and Urban Affairs will consider the legislation next week to debate the bill and determine if it will be recommended to the full Senate or needs further amendments. It will be the first time the Senate has considered the legislation.
The House of Representatives has passed a version of the bill known as the SAFE Banking Act seven times between 2019 and 2022 while under Democratic control.