A Senate legislative panel has approved an amended version of the Secure and Fair Enforcement Regulation (SAFER) Banking Act, a bill designed to provide the regulated marijuana industry with access to basic banking services. This bipartisan legislation, initially named the SAFE Banking Act, was introduced by Senators Steve Daines (Republican from Montana) and Jeff Merkley (Democrat from Oregon). If passed, it would ease access to traditional banking services for cannabis companies operating legally under state or tribal law. Currently, federal regulations restrict such services, forcing many cannabis businesses, especially smaller operators, to operate in cash, making them vulnerable to crime.
The new SAFER Banking Act is the result of negotiations among senators and includes provisions such as requiring federal regulators to develop uniform guidance and examination procedures for cannabis-related deposits and to update guidance related to hemp-related businesses and service providers. Regulators would also be prohibited from closing bank accounts without a valid reason. Additionally, the legislation safeguards employees of state-legal cannabis businesses who seek residential mortgages funded by federal programs.
The Senate Committee on Banking, Housing and Urban Affairs approved the amended bill after a markup hearing. The bill’s text has not been made publicly available yet, but the changes include extending the deadline for the Treasury secretary to publish updated guidance for banks serving the cannabis industry from 180 days to one year. The guidance requires financial institutions serving marijuana businesses to submit Suspicious Activity Reports (SARs) about their cannabis clients. The bill was also revised to clarify that cannabis-related financial transactions should not be considered “proceeds from an unlawful activity.”
The amended bill requires the director of the Financial Crimes Enforcement Network (FinCEN) to testify before Congress about efforts to combat money laundering within a year of the legislation’s enactment. It also adds federal home mortgage banks to the list of protected financial institutions serving legal marijuana businesses under state or tribal law.
However, the amended bill faces opposition in the House of Representatives. Representative Blaine Luetkemeyer, a Republican from Missouri, expressed concerns that the revised Section 10 of the bill still gives banking regulators broad discretion, potentially leading to discrimination against controversial businesses. Senate Majority Leader Chuck Schumer plans to bring the SAFER Banking Act to a vote in the Senate and has also promised to attach criminal justice-related amendments, including expungement of past marijuana offenses and protection of the gun rights of marijuana users.
By FCCT Editorial Team
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