With 33 states having legalized marijuana in some form, cannabis-related companies and banks that want their business have been looking for signs of a breakthrough that will make cannabis banking easier. They might get one in the form of the SAFE Banking Act, which would remove many regulatory risks that have caused banks to shy away from knowingly serving the cannabis industry.
The bill passed the U.S. House of Representatives Sept. 28 on a bipartisan 321-103 vote. The Secure and Fair Enforcement Act of 2019, also known as the SAFE Banking Act, is expected to get a Senate committee hearing before the end of the year.
While the SAFE Banking Act has the best prospects of any federal cannabis banking bill to date, it’s a narrow solution to a complicated problem, according to panelists at a CBA CLE presentation Wednesday. Christian Sederberg, a founding partner of cannabis law firmVicente Sederberg in Denver, and Jenifer Waller, COO of the Colorado Bankers Association, laid out the challenges banks face in doing business with marijuana-related businesses, or MRBs. Sederberg and Waller also broke down the SAFE Banking Act and issues it would and would not address in MRB banking.
The SAFE Banking Act would prohibit federal banking regulators, like the Federal Reserve or FDIC, from penalizing banks for providing services to legal MRBs. It would also ban regulators from trying to influence banks away from MRB customers. The bill, however, wouldn’t legalize marijuana in any sense. It remains federally outlawed under the Controlled Substances Act.
“I think everyone in the room knows that that is where cannabis is parked,” Waller said. “That is the challenge. That’s what makes it illegal for us to serve the industry still, technically.”
According to the Financial Crimes Enforcement Network, 553 banks were serving the cannabis industry as of June 30, 2019 — up from 334 a year prior.