U.S. Senate Considering Banking Access for Legal Marijuana Businesses

Yesterday, May 17, U.S. Senators Cory Gardner (R-CO), Jeff Merkley (D-OR), Ron Wyden (D-OR), Rand Paul (R-KY), Michael Bennet (D-CO), Patty Murray (D-WA), Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), and Brian Schatz (D-HI) introduced legislation to ensure that legal cannabis businesses can access banking services.

The Secure and Fair Enforcement (SAFE) Banking Act of 2017 would solve a key logistical and public safety problem in states that have legalized medicinal or recreational cannabis.

Currently, cannabis businesses operating under state laws that have legalized medicinal or recreational cannabis have been mostly denied access to the banking system because banks that provide them services can be prosecuted under federal law. Without the ability to access bank accounts, accept credit cards, or write checks, businesses must operate using large amounts of cash. This creates safety risks for businesses and surrounding communities, and makes it more difficult for local and state governments to collect taxes.

“Conflicting federal and state marijuana laws make it difficult for legitimate businesses to use the basic financial services they need access to and this bipartisan legislation gives them that access they need,” said Senator Gardner. “We must also take into account the risk to public safety as these businesses are being forced to carry around bags of money to pay for their employees and rent. Legal businesses should not be treated like this, and I’m glad that Republicans and Democrats are working together to address this issue.”

The bill would prevent federal banking regulators from:

  • Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
  • Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
  • Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
  • Taking any action on a loan to an owner or operator of a cannabis-related business.

The bill also creates a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services.

The bill would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.

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