In a vote late yesterday, the U.S. House passed the SAFE Banking Act of 2021 by a 321 to 101 margin with strong bipartisan support. The Act, H.R. 1996, would clarify regulations for those financial institutions choosing to provide banking services to state-legalized cannabis businesses by prohibiting federal banking regulators from penalizing banks and other depository institutions engaging with those businesses. A total of 36 states and four territories have authorized the use of marijuana for medical purposes and 17 states have authorized it for recreational use. Click here to search for how the Wisconsin Delegation voted.
Since marijuana is still considered a prohibited substance under the federal Controlled Substances Act and banks that provide services to cannabis businesses can be penalized under federal money laundering laws, this legislation is critical. Currently, marijuana is not legal in any fashion in Wisconsin.
In a letter sent yesterday, 51 state bankers associations expressed their support for the SAFE Banking Act which will act as an important step to how banks will safely work with legalized cannabis and cannabis-related businesses. Addressed to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, the letter was sent in advance of the House consideration on suspension bills, including the SAFE Banking Act, last night.
“Although we do not take a position on the legalization of marijuana, our members are committed to serving the financial needs of their communities – including those that have voted to legalize cannabis," the letter stated.
With 70% of the U.S. population having legalized cannabis for either medical or recreational purposes, current federal laws still prevent banks from safely banking these businesses. Many of these businesses therefore face concerns of public safety, revenue administration, and legal compliance. If passed, this legislation would address the reality of the current marketplace and allow banks to serve cannabis-related businesses in states where it has been legalized.
Senate Majority Leader Chuck Schumer indicated he would work toward lifting the federal ban on cannabis and is expected to draft legislation with either Senate Finance Chair Ron Wyden of Oregon or Sen. Cory Booker of New Jersey.