On March 7, Rep. Ed Perlmutter (D-CO) introduced into the 116th Congress H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019. The Act will, in spite of the federal Controlled Substances Act’s scheduling of marijuana, prohibit the federal banking regulators from taking actions against banks that are providing services to cannabis businesses that are operating legally under state or Indian tribal law or to businesses that provide goods or services to such legally-operating cannabis businesses.
The Act goes further than the version introduced in the last (the 115th) Congress and would protect ancillary businesses like real estate owners, accountants and other vendors from money laundering and other federal laws for taking funds from such legally-operating cannabis businesses.
Importantly, the Act would also prohibit any criminal, civil or administrative forfeiture in connection with legal collateral rights that depository institutions have in connection with loans that they make to legally-operating cannabis businesses or related ancillary businesses.
The sponsors of the legislation and virtually all state legal marijuana businesses believe strongly that the current inability of most legally-operating cannabis businesses to obtain banking services, which has led to many cash-only transactions, poses both a dangerous public safety risk as well as a greater risk for unreported income and the loss of federal and state tax revenues.
A version of H.R. 1595 was discussed at a Congressional hearing on February 13, and although the bill was referred to the House’s Committee on Financial Services on March 7, so far no action on it has been taken.
Our current view of H.R. 1595 is that the bill is fairly likely to pass the Committee and the House, but is much less certain to be adopted by the Senate.