Bipartisan Group in U.S. House Introduce Marijuana-Related Banking Legislation
Legislation works to align state and federal banking laws, reduce threats to public safety in states and localities that have legalized marijuana
Washington, D.C. – Alaska Congressman Don Young, co-founder of the Congressional Cannabis Caucus, today joined a bipartisan group in the U.S. House of Representatives to introduce legislation that allows marijuana-related businesses in states with existing regulatory structures to access the banking system.
With eight states and Washington, D.C. now allowing for adult-use recreational marijuana and 29 states legalizing medical marijuana, there is a growing effort in Congress to align federal and state marijuana laws - specifically as they relate to the banking crisis confronting marijuana-related businesses. The Secure and Fair Enforcement Banking Act (SAFE Banking Act) ensures financial institutions can service marijuana-related businesses without the fear of reprisal from the federal government. Currently, hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes.
“As a co-founder of the Congressional Cannabis Caucus, one of my top priorities is ensuring marijuana-related businesses have access to the banking system and can operate in accordance with state law,” said Congressman Don Young. “This legislation is an important step to ensuring marijuana businesses in states that have legalized – who continue to operate in a very uncertain and insecure environment without access to banks or financial institutions – can be treaty fairly and as legitimate contributors to state and local economies. While I do not personally advocate for the use of marijuana, I do support these types of issues as a matter of states’ rights and their ability to determine the nature of criminal activity within their own jurisdictions.”
Additionally, the SAFE Banking Act works to address the potential threats to public safety that can arise when small businesses are forced to operate on a cash-only business.
“With the majority of states now allowing for some form of recreational or medical marijuana, we have reached a tipping point on this issue and it’s time for Congress to act,” said bill sponsor Rep. Ed Perlmutter (CO-07). “Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels.”
“Since we first introduced this legislation, voters in a total of six states and the District of Columbia have joined Colorado and Washington state in approving adult use of recreational marijuana,” Rep. Denny Heck (WA-10) said. “Nearly a quarter of the U.S. population now lives in a place where adult use is legal. And yet because of these federal restrictions, cash will continue to reign just as it did on the black market. To keep the money out of the hands of drug cartels, and to keep marijuana out of the hands of kids, and to protect the industry from more deadly armed robberies, we need a system that allows for electronic financial transactions. Voters across the country of all political backgrounds have shown they are serious about taking the right steps to regulate marijuana like alcohol, and those steps must include access to the banking system.”
Today, financial institutions who provide banking services to legitimate marijuana businesses are subject to criminal and civil liability for "aiding and abetting" a federal crime and money laundering under the Controlled Substances Act and federal banking statutes. The SAFE Banking Act removes uncertainty by providing "safe harbor" protections for depository institutions who provide a "financial product or service" to a covered business. For example, federal banking regulators would not be able to threaten or limit a bank or credit union’s Deposit Insurance, take any action or downgrade a loan made to a covered business, or force a depository institution to halt providing any kind of banking services to a marijuana-related legitimate business.
A similar companion bill in the Senate is expected to be re-introduced later this month.