Monday, September 30, 2019
“American voters have spoken and continue to speak, and the fact is you can't put the genie back in the bottle,” said Rep. Ed Perlmutter, D-Colo., author of the legislation. “Prohibition is over. Our bill is focused solely on taking cash off the streets and making our community safer.”
Laws in 33 states and the District of Columbia now permit the use of cannabis products, like marijuana and CBD oils, for medicinal purposes and, in some states, adult recreational purposes. Arcview Market Research, which keeps tabs on the cannabis market, estimates legal cannabis businesses rang up $11 billion in sales last year, and the market is on track to top $23 billion in sales by 2022. But most of these sales are transacted in cash, because financial institutions, fearful of running afoul of federal laws against cannabis and potentially getting shut down by regulators, decline to do business with these firms. This, in turn, has created a significant public safety risk, as cannabis businesses flush with cash have become targets for criminals.
“Today is a step forward for a common-sense bill that will make communities across the country safer,” Representative Steve Stivers, R-Ohio, a co-sponsor of the bill, said following House passage of the SAFE Banking Act.
The SAFE Banking Act would create a safe harbor for financial institutions that want to accept deposits and provide other financial services to business that are licensed by states and/or local governments to grow, transport, display or sell cannabis products. The legislation also applies to companies providing ancillary services, such as testing labs, to cannabis businesses.
“Passing this bill keeps the right perspective: no federal regulator should block Americans’ lawful access to the financial system,” added Rep. Warren Davidson, R-Ohio, another co-sponsor. “This principle holds true whether you are talking about firearms or cannabis.”
Similar legislation has been introduced in the Senate by Senator Cory Gardner, R-Colo., and Jeff Merkley, D-Ore. A hearing was held on that bill in July before the Senate Banking Committee, and Senator Mike Crapo, R-Idaho, the chairman of that committee, promised a committee vote on cannabis legislation this fall. But it’s unclear if the bill the panel votes on will be the SAFE Banking Act. “We may craft our own bill, or we may work with them to craft any amended legislation,” Sen. Crapo told Politico.
During the July hearing, Sen. Crapo suggested federal laws may be choking off legal business from the banking sector – a reference to Operation Choke Point, a 2013 initiative by the Department of Justice to go after banks that worked with firearms dealers, payday lenders and other businesses deemed high risks for fraud and money laundering.
“Operation Choke Point was deeply concerning because law-abiding businesses were targeted strictly for operating in an industry that some in government disfavored,” Sen Crapo said. “Under fear of retribution many banks have stopped providing financial services to members of these lawful industries for no other reason than political pressure, which takes the guise of regulatory and enforcement scrutiny.”
The SAFE Banking Act enjoys the support of a wide range of national organizations and state officials, including the American Bankers Association, the Credit Union National Association, the Electronic Transactions Association, the Independent Community Bankers Association, the National Association of Attorneys General, 20 governors and 18 state banking supervisors.
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