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February 27, 2023 • Issue 23:02:02

Washington hones focus

on fintech, payments

An ardent champion of gun rights, Sen. Crapo railed
against banks during the Obama Administration when
gun manufacturers and sellers got caught up in the Justice
Department's Operation Choke Point, which closed off
banking to several high-risk verticals.
Cannabis banking anyone?

The Secure and Fair Enforcement (SAFE) Banking Act,
approved by the House in 2022 but stalled in the Senate,
is expected to try again during the 118th Congress. Like
Crapo's bill, the SAFE Banking Act seeks to guarantee
access to banking by specific types of business, in this case
state-licensed sellers of cannabis products.

Most financial institutions reject cannabis businesses
because pot remains illegal under federal law, and to
qualify for federal deposit insurance FIs must abide by
By Patti Murphy federal laws. The SAFE Banking Act would provide a safe
harbor for banks and credit unions doing business with pot
everal bills targeting the fintech and payments shops that operate legally under state laws.
sphere will seek a path to enactment during the
118th Congress, which spans 2023 and 2024. And it would prohibit federal regulators from punishing
S Senator Mike Crapo, R-Idaho, who wants to FIs that serve cannabis companies, their owners and
nix a special merchant category code (MCC) for firearms employees with onerous risk management requirements.
dealers, proposed a bill to stop any form of "discrimina-
tion by financial services providers against constitutionally According to industry observers, the fact that lawmakers in
protected industries and law-abiding businesses such as both parties stepped up late last year to try and get SAFE
firearms dealers." across the finish line bodes well for the bill now. "It almost
has to pass," said James Huber, attorney at Global Legal
To date, 35 senators have signed on as co-sponsors of Sen.
Crapo's Fair Access to Banking Act.
Just say no to gun MCC
Contributed articles inside by:
MCCs are created by the International Standards
Organization and assigned by the card brands. They
identify specific verticals, and interchange rates generally
get assigned by MCC. Sometimes, however, MCCs describe Nick Cucci ................................................................................................19
catch-all categories, like "specialty retail," an MCC that Natasa Cvijanovic .................................................................................28
includes firearms and ammunition stores.
Allen Kopelman .....................................................................................30
When the new MCC specific to firearms dealers was Ken Musante ..........................................................................................32
announced in September 2022, the major card brands—
Visa, Mastercard and American Express—said they would
comply. Sen. Crapo wants them to back down.
Continued on page 26