WASHINGTON — Advocates for the banking and payments industries are urging the U.S. Senate to include a long-sought safe harbor for cannabis banking in an upcoming military spending package.
In a letter sent congressional leaders Tuesday, industry officials asked the senators to weigh the inclusion of the Secure and Fair Enforcement Banking Act inside the National Defense Authorization Act for the 2022 fiscal year, writing that the status quo was "untenable” for the cannabis industry and financial sector alike.
The letter was addressed to Sens. Chuck Schumer, D-N.Y., Mitch McConnell, R-Ky., Sherrod Brown, D-Ohio, Pat Toomey, R-Pa., Jack Reed D-R.I., and James Inhofe, R-Okla.
“Financial institutions adhere to stringent anti-money laundering reporting requirements and monitor accounts for suspicious activity,” said the letter, signed by the American Bankers Association, the Credit Union National Association, the National Bankers Association, the Electronic Transaction Association and several other trade groups. “By bringing [cannabis-related businesses] into the regulated financial system, you would be giving regulators and law enforcement the tools they need to identify and prosecute bad actors."
The SAFE Banking Act would grant legal cover to federally regulated financial institutions that provide services cannabis-related companies in states where the substance has been legalized. In September, a bipartisan group of more than 300 lawmakers in the House of Representatives passed the measure in the House version of a defense spending bill, but the proposal has been met with skepticism by a number of senators.
The trade associations argued that the defense reauthorization bill was an appropriate vehicle for cannabis banking, writing that the SAFE Banking Act would bring significant relief to an industry that has become “a cash intensive environment that is a target for violent crime.”
“SAFE banking is germane to [the National Defense Authorization Act] because it bolsters national security by keeping bad actors out of the cannabis industry and the financial system,” the advocates said.
The push for cannabis banking reform has had broad bipartisan support for years but lost momentum in early 2021, when Democrats took full control of Congress and some shifted their focus to full-scale marijuana legalization.
Analysts believe that until full cannabis legalization is either accomplished or soundly defeated, Democratic leadership in the Senate will view the SAFE Banking Act as a half-measure that could undermine a more ambitious set of reforms.
But in their letter, the trade associations pushed back on that political calculus.
“We understand that creating a true federal regulatory framework for cannabis is a multi-step process,” the advocates wrote. “However, we strongly believe that the SAFE Banking Act is a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
