The Secure and Fair Environment (SAFE) Banking Act, or the cannabis banking bill seeks to enable the cannabis industry to use banks and banking services, has been revived thanks to the efforts of Representative Ed Perlmutter. According to MJ Biz Daily, it is once again at play after it was attached to the domestic spending bill America Creating Opportunities to Meaningfully Promote Excellence in Technology (COMPETES) Act of 2022.
Perlmutter filed the amendment toward the end of January 2021, said Marijuana Moment. The House Rules Committee gave the go signal and the full House will be studying the bill. This will be the sixth time the representative has driven a cannabis banking measure through the House.
Banking has been one of the biggest challenges of the cannabis industry as banking institutions hesitate to serve marijuana businesses to avoid getting in trouble with the law as marijuana remains to be illegal on the federal level.
The SAFE Banking Act was introduced by Perlmutter in the hopes of unifying state and federal law and prohibiting federal regulatory bodies from taking penalizing actions against institutions that serve licensed cannabis businesses and other related businesses.
It has passed the House five times, with its latest attempt in September 2021 when it was attached as an amendment to the Fiscal Year 2022 National Defense Authorization Act, where it passed with a vote of 321 to 101.
The act received bipartisan support in November 2021 from Members of Congress (180) and Senators (39). Supporters from both groups serve as co-sponsors for the SAFE Banking Act.
Representatives Nydia Velazquez, Warren Davidson, Barbara Lee, Dave Joyce, and Earl Blumenauer are also named co-sponsors of the bill. Representative Tom Cole, a member of the panel, expressed his support of the measure, as well.
Twenty-one state and territory governors also expressed support for this legislation, along with various organizations such as the American Bankers Association, American Financial Services Association, Credit Union National Association, and Council of Insurance Agents & Brokers.
National Credit Union Administration board member and former chairman Rodney Hood have mentioned that marijuana legalization is bound to come sooner or later. Hood, who is a federal financial regulator, is willing to provide his assistance in navigating the conflict between federal and state policies on marijuana banking.
The legislative conflict between federal and state laws has made banks more reluctant to work with cannabis businesses, with these licensed organizations opting for cash and other alternative financial services.
High-cash businesses have a history of being targeted by criminals, placing their communities at risk. There have been reports of dispensary staff being killed due to these crimes.
Regarding the revitalization of the bill, Perlmutter said, “The SAFE Banking Act is the best opportunity to enact some type of federal cannabis reform this year and will serve as the first of many steps to help ensure cannabis businesses are treated the same as any other legal, legitimate business.”
The COMPETES Act is meant to help the production of semiconductors in the United States through the help of $52 billion in domestic funds as a way to compete with China. The act is expected to support research and manufacturing, according to CNBC.
It is the House’s response to the Senate’s U.S. Innovation and Competition Act, which originally included a $250 billion domestic aid fund.
House Speaker Nancy Pelosi is optimistic about the new spending bill. She said, “Today, the House takes action to transport our nation into the future, with the America COMPETES Act; bold, results-oriented legislation that will strengthen America’s national and economic security and the financial security of families, and advance our leadership in the world.”
The act is ultimately expected to innovate chip production in the U.S., increasing supply, meeting demands, and improving research capacity. It is presumed to pass the House by March 1.
While the new efforts for cannabis banking are good news to supporters and affected businesses, the possibility of it being a law remains hazy because the American COMPETES Act is simply a response to a previously proposed spending bill.
The existence of a previous bill in the form of the U.S. Innovation and Competition Act means that the House and the Senate should find common ground through a committee.
Senate Majority Leader Chuck Schumer is intent on finalizing a bill that the president can sign. It is important to note the SAFE Banking Act was removed from the military spending bill after a bicameral negotiation using the same process.
Perlmutter attributed the most recent failure of the bill to Schumer, who insist that more encompassing legalization is needed before a more particular change in cannabis banking policy. It is worth mentioning that Schumer is preparing to file such a comprehensive cannabis legalization bill.
Advocates and stakeholders view Perlmutter’s bill as a more passable one as it has bipartisan support, while a comprehensive bill is yet to have more defined and stronger support in the Senate.
Schumer has expressed approval of the cannabis banking reform only if additional provisions were to be attached. In particular, he is looking for an equity provision that would prioritize communities impacted by marijuana prohibition.
Republicans have also shown uncertainty as to why the bill remains to be passed as it is seen as a “modest banking reform,” complete with support from majorities in the House and Senate. Majorities are also in control of the White House.
Nevertheless, Perlmutter said that he will work to make the SAFE Banking Act into law in every way possible. He is willing to attach the measure into “every single bill [he] possibly can until it’s passed.”
The proceedings are expected to show whether America COMPETES Act is a more viable avenue for cannabis banking compared to its previous carrier, the NDAA.
Should the banking reform be passed, it is expected that banks and other financial institutions will be more willing to work with licensed cannabis businesses and ancillary organizations, or entities that provide services to cannabis-related operations.
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