Momentum Gains For Cannabis Banking Measure

by Keith Thornburg, MBA General Counsel

In a bipartisan 321-103 vote, the U.S. House of Representatives passed legislation that would allow banks to serve cannabis-related businesses in states where marijuana is legal and prohibit federal regulators from taking action against banks solely because cannabis is involved.

The House approved the Secure and Fair Enforcement Banking Act, commonly known as the SAFE Banking Act, on Sept. 25. The legislation picked up several changes and three new sections to broaden the bill’s focus from the marijuana industry to promoting and preserving access to critical banking and financial services.

These changes included the following. 

  • bank access for hemp and CBD businesses, which are now fully legal businesses under federal or state oversight 
  • provisions to prevent termination or denial of banking access solely for reputational concerns (prohibits federal schemes like Operation Choke Point)
  • improved access to financial services for minority-owned and diverse businesses
  • protections for the Federal Reserve banks and the Federal Home Loan Banks that extend services to banks and credit unions
  • improved and protected access to all payment networks, including payment cards, and to insurance services and products
  • strengthened protections that ensure legitimate businesses are not infiltrated by transnational criminal enterprises
These provisions helped secure additional support for the SAFE Banking Act’s passage. Among the 91 Republicans voting for the bill were Missouri Reps. Blaine Luetkemeyer and Billy Long. Missouri’s congressional delegation split 4-4 in the final vote; Reps. Lacy Clay and Emanuel Cleaver also voted for the measure.

The SAFE Banking Act has now been referred to the Senate Banking Committee. Many of the House enhancements and reorienting the legislation from marijuana to a broader focus on promoting and preserving public access to banking and financial services also could draw support from Senate Republicans who have traditionally opposed marijuana-related bills.

Senate Banking Committee Chairman Mike Crapo, R-Idaho, who does not support lifting the federal ban on marijuana, recently indicated a willingness to take up the House bill or a Senate version that may further expand the bill. One example of additional concern, highlighted by the opioid and vaping crises, is whether federal standards and oversight for products intended for human ingestion should be strengthened, improved and expressly extended to address cannabis and hemp products. Such enhancements could draw both the Drug Enforcement Administration and the Food and Drug Administration into the bill.

MBA has reviewed the bill and provides a section overview of the SAFE Banking Act.