Bipartisan legislation would ensure that legal cannabis businesses can access critical financial services, increase public safety
Washington, D.C. – Today, U.S. Senator Cortez Masto joined U.S. Senators Jeff Merkley (D-Ore.) and Steve Daines (R-Mont.), as well as Representatives Dave Joyce (R-Ohio-14) and Earl Blumenauer (D-Ore.-03), in cosponsoring the bipartisan, bicameral Secure and Fair Enforcement (SAFE) Banking Act to ensure that legal cannabis businesses have access to critical banking and financial services.
“I’m fighting to ensure that legal cannabis businesses in Nevada can open bank accounts, accept credit cards or write checks to limit security risks and ensure regulatory certainty in the industry,” said Senator Cortez Masto. “Our legislation will support Nevada businesses, boost our economy, and keep our communities safe from money laundering and other crimes.”
Most state legal medicinal or recreational cannabis businesses are denied access to traditional and secure banking systems and financial services because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. Due to the lack of access to financial services, state legal cannabis businesses are forced to operate their businesses solely using cash, leaving communities vulnerable to criminal activity.
To address the safety concerns resulting from these state-legal businesses being shut out of banking services, the SAFE Banking Act would prevent federal banking regulators from:
- Punishing a bank for providing financial services to a legitimate state-sanctioned and regulated cannabis business or an associated business (such as a lawyer, vendor or landlord providing services to a legal cannabis business);
- Terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business;
- Pushing a bank to halt or downgrade providing any kind of banking services to these businesses; or
- Taking any action on a loan to an owner or operator of a cannabis-related business.
The bipartisan the SAFE Banking Act would also create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The bill also provides protections for hemp and hemp-derived cannabidiol (CBD) related businesses. This bipartisan legislation, for the first time, explicitly extends the safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) to ensure they can also serve cannabis businesses. CDFI and MDI serve underserved communities who face challenges in accessing capital and provide affordable access to financial services. Additionally, it would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.
In addition to U.S. Senators Cortez Masto, Merkley, and Daines, this legislation is cosponsored by Senators Jacky Rosen (D-Nev.), Bill Cassidy (R-La.), Kirsten Gillibrand (D-N.Y.), Cynthia Lummis (R-Wyo.), Brian Schatz (D-HI), Lisa Murkowski (R-Ala.), Edward J. Markey (D-Mass.), Kevin Cramer (R-N.D.), Ben Ray Luján (D-N.M.), Dan Sullivan (D-AK), Rand Paul (R-Ky.), Angus King (I-Maine), Tammy Duckworth (D-Ill.), John Fetterman (D-Pa.), Ron Wyden (D-Ore.), Kyrsten Sinema (I-Ariz.), Alex Padilla (D-Calif.), Dick Durbin (D-Ill.), Peter Welch (D-Vt.), Mark Kelly (D-Ariz.), Michael Bennet (D-Colo.), Patty Murray (D-Wash.), Tina Smith (D-Minn.), Amy Klobuchar (D-Minn.), Elizabeth Warren (D-Mass.), Tim Kaine (D-Va.), Debbie Stabenow (D-Mich.), Bernie Sanders (I-Vt.), Bob Menendez (D-N.J.), Chris Coons (D-Del.), John Tester (D-Mont.), Mark Warner (D-Va.), Martin Heinrich (D-N.M.), John Hickenlooper (D-Colo.), Mazie Hirono (D-Hawaii), Gary Peters (D-Mich.), and Chris Murphy (D-Conn.).
The bill text can be found HERE.
As a member of the Senate Finance Committee and a former Attorney General, Senator Cortez Masto has been a strong advocate for protecting our financial systems and cracking down on financial crimes. She passed into law her bipartisan legislation to combat money laundering and terrorism through financial intelligence by bolstering the Financial Crimes Enforcement Network (FinCEN) to work with tribal law enforcement agencies, protect against domestic terrorism and focus on virtual currencies. She has also introduced legislation to incentivize whistleblowers to report consumer fraud.