This week the United States House of Representatives is expected vote on the Secure and Fair Enforcement (“SAFE”) Banking Act under a special process called “suspension of the rules,” which allows for limited debate and requires a two-thirds majority to support it for passage. The bipartisan bill would effectively protect financial institutions serving cannabis-related (defined as marijuana) businesses from federal intervention in states or Indian country that allow for the “cultivation, production, manufacture, sale, transportation, display, dispensing, distribution, or purchase of cannabis.” Specifically, the bill would proscribe federal banking regulators from:
- Terminating or limiting the deposit insurance or share insurance of a depository institution solely because the depository institution provides or has provided financial services to a cannabis-related legitimate business or service provider;
- Prohibiting, penalizing, or otherwise discouraging a depository institution from providing financial services to a cannabis-related legitimate business or service provider or to a state, political subdivision of a state, or Indian tribe that exercises jurisdiction over cannabis-related legitimate businesses;
- Recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder, or to downgrade or cancel the financial services offered to an account holder solely because is or a part of a cannabis-related legitimate business or service provider;
- Taking any adverse or corrective supervisory action on a loan made to a customer that is or a part of a cannabis-related legitimate business or service provider; and
- Prohibiting or penalizing a depository institution for, or otherwise discourage a depository institution from, engaging in a financial service for a cannabis-related legitimate business or service provider.
The bill would also require the Financial Institutions Examination Council to develop uniform guidance and examination procedures for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers no later than 180 days after the new law is enacted.
Currently the bill has 206 cosponsors, with 180 Democrats and 26 Republicans signing on. If the bill were able to get through the House this week, it will encounter a Republican-majority Senate that is yet to indicate whether it is willing to amend the House bill or continue to craft its own version of the SAFE Banking Act.
Further, versions of the bill circulating publicly include language beyond the terms described above, including clarification that banks can legally service the hemp industry and calling for guidance to be issued. As of the time of posting, we cannot confirm whether such language is still under consideration. It has not been added to the version of the bill posted on Congress.gov.