U.S. House Democrats on Thursday advanced legislation to give cannabis businesses greater access to banking, approving protections for financial institutions for the first time in six years of legislative attempts.
The Secure and Fair Enforcement Banking Act would offer legal safe harbor for banks and credit unions that choose to serve state-approved marijuana-related businesses if they comply with a set of reporting requirements.
The bill, approved by the House Committee on Financial Services in a 45-15 vote, is a top priority for a marijuana industry largely shut out of mainstream banking and forced to deal in large sums of cash.
“What we’ve done is draft a piece of legislation that is narrowly confined to the financial services industry so that … businesses that are legitimate in their states can get legitimate banking services—credit cards, payroll, checking accounts, lending,” said Rep. Ed Perlmutter, D-Colorado, one of the bill’s lead authors. “Because we’ve seen that across the country, huge piles of cash are developed by these businesses and particularly create real public safety hazards.”
Democratic control of the House has provided a friendlier environment for marijuana bills such as the Secure and Fair Enforcement Banking Act, which in previous congresses had been bottled up by the key Republican chairman.
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California Democrat Maxine Waters now chairs the Financial Services Committee and has expressed support for measures to protect state-regulated marijuana. At Waters’ request, Perlmutter added language to his bill Wednesday to require banking regulators to report annually on the availability of banking services to minority- and women-owned cannabis businesses.
“I also consider this bill as part of a holistic approach toward providing criminal justice reform to those who have been harmed by criminalization of marijuana and should not by any means be the only bill the House takes up on the important issue of cannabis reform,” Waters said.
Perlmutter said he had 151 co-sponsors for his legislation, including some Republicans. Many Republicans on the Financial Services Committee, however, opposed the bill and tried unsuccessfully during Wednesday’s marathon markup session to attach hostile amendments.
“We need to ensure that we’re doing our due diligence before proceeding,” said North Carolina Rep. Patrick McHenry, the ranking Republican member of the committee. “One committee hearing is not enough to fully understand the consequences of this bill. It is a massive change in federal policy.”
At the end of 2018, 551 banks and credit unions across the country reported serving marijuana-related businesses, according to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network.
“The SAFE Banking Act would go a long way toward improving safety, transparency, access, and justice in the cannabis industry,” said Aaron Smith, executive director of the National Cannabis Industry Association. “The amendments agreed upon in committee should solidify the already overwhelming support for this legislation in the House. The cannabis and financial services industries have been waiting for clarification and protection for far too long, and we are confident the House would approve this bill if allowed to vote on it without further delay.”