US House Approves SAFE Banking Act as Part of Military Spending Act in Historic Vote

The US House of Representatives on Thursday approved the Secure and Fair Enforcement (SAFE) Banking Act as part of the newest National Defense Authorization Act, a law governing military spending, in a bipartisan vote with 316-113 votes. It is the fifth time the bill has been passed in the House of Representatives as a standalone bill or as an amendment as part of a larger bill.

With nationwide cannabis reform enacted over the past four decades, cannabis companies are still not fully tolerated, most obviously in state restrictions, such as the way banking is restricted.

Rep. Ed Perlmutter reintroduced the bill as promised, saying it would give cannabis companies access to the banking system – like any other industry – and bring more money into the economy and the opportunity to create high-paying jobs.

On September 21, the House Rules Committee approved the SAFE Banking Act after reviewing over 800 amendments to the National Defense Authorization Act (NDAA) totaling $ 778 billion for FY2022 to determine which one vote obtain. Since Representative Perlmutter sits on the rules committee, this suggests that he has influence.

Currently, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Guidance provides informal guidance on banking with cannabis companies, but still nothing to immunize a financial institution from federal prosecution – only a law of Congress can do it.

Bloomberg reported that the SAFE Banking Act would be a boon to cannabis companies that were previously forced to do business with cash due to federal banking restrictions. Cannabis related companies that provide financial services have agreed.

“The passage of the SAFE Banking Act is a historic, significant step forward for the cannabis industry, which, like any other mainstream industry, deserves more legitimacy and access to banking, insurance and other services. This legislation will give cannabis entrepreneurs much-needed access to financial institutions and credit, ”said Ryan Hale, chief sales officer of Operational Security Solutions (OSS). “As herding dogs for the security industry, we now know that many compliance issues will remain as long as cannabis is still a List I drug and the passage of the SAFE Banking Act will only mean more regulation for the industry.”

The bill would protect banks that operate state-licensed cannabis businesses from being penalized by federal regulators. In December 2020, the US Treasury Department found that 515 banks and 169 credit unions were already offering such services.

NORML sent a letter to the leaders of Congress in support of its entry into the NDAA. NORML Political Director Justin Strekal greeted the law cautiously:

“It is vitally important to weigh the need for major federal reforms and make every effort to support the successful government programs to ensure safe and efficient consumer access to high quality cannabis that is competitive with the unregulated cost Market, ”said Strekal. “For these reasons, we support the incorporation of the SAFE Banking Act into every law that comes into force.”

Proponents speculated that the SAFE Banking Act, because of its bipartisan support and because the Senators don’t want a small bill to hold back the “must-pass” NDAA, might have a better chance of success than a standalone bill.

Leaders like Senate Majority Leader Chuck Schumer and Senator Cory Booker have been somewhat reluctant to endorse the law without seeking broader reform. Both envision broader cannabis reform such as the Cannabis Administration and Opportunity Act (CAOA).

“As someone who has worked in the banking industry for most of my career, I have seen firsthand the many challenges banks face when trying to serve cannabis companies,” said Andrew Montgomery, Founder and CEO of HD Compliance . Montgomery is a seasoned banking professional with over 25 years of senior executive experience in the industry.

He continued, “While this is not the first time the legislature has added what appears to be an independent bill to a broader bill that is likely to pass without scrutiny, we must remember that the SAFE Banking Act has already passed four times in the House of Representatives became. two of them were related to economic aid laws for COVID-19. The Senate failed to respond to each of these bills. However, burying it in the Defense Authorization Act can provide cover for GOP senators who want to support SAFE Banking and allow Senator Cory Booker to oppose the bill. This could very well be a back door to get this required legislation in place. “

While some leaders have argued over the appropriateness of including the SAFE Banking Act in a military spending bill, veteran support for cannabis is high. For example, NORML made it clear that the expense account was indeed a “suitable vehicle” for cannabis reform. According to the American Legion, nearly one in four veterans currently uses cannabis for medical reasons.