Marijuana Safe Banking Act – 2024 Update
UPDATE – April 2024: ABA Statement: SAFER Banking Act Still Moving Forward, Even if the Current Administration Moves to Reclassify Cannabis
“While ABA takes no position on the legalization of cannabis, it’s important for policymakers to know that any potential decision to reclassify cannabis has no bearing on the legal issues around banking it. Cannabis would still be largely illegal under federal law, and that is a line many banks in this country will not cross. The solution is the bipartisan SAFER Banking Act, which would allow banks to provide services to the cannabis industry in those states where it’s now legal. Passing that legislation in Congress would address the ongoing legal limbo around cannabis banking, while enhancing public safety, tax collection and transparency.”
Reintroduced in House & Senate (04/26/2023)
Senators Jeff Merkley (D) and Steve Daines (R), and Representatives Dave Joyce (R) and Earl Blumenauer (D) were the lead sponsors.[27][28] The Senate Banking Committee chair, Sherrod Brown, said the bill could get a hearing in the first half of May, 2023,[29] and the first Senate hearing was held on May 11.[30][31] The bill was scheduled for markup by the Senate Banking Committee in June.
SUMMARY OF THE SAFE BANKING ACT
This bill is designed to prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business. Prohibited penalties include: 1. terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate cannabis-related business and 2. prohibiting or otherwise discouraging a depository institution from offering financial services to such a business.
It also states that proceeds from a transaction involving activities of a legitimate cannabis-related business are not considered proceeds from unlawful activity..
In addition, under federal law a depository institution could not be held liable or subject to asset forfeiture for providing a loan or other financial services to a legitimate cannabis-related business.
The bill provides that a federal banking agency may not request or order a depository institution to terminate a customer account unless (1) the agency has a valid reason for doing so, and (2) that reason is not based solely on reputation risk. Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.
Finally, the bill decreases the cap on the surplus funds of the Federal Reserve banks. (Amounts exceeding this cap are deposited in the general fund of the Treasury.)
About the American Bankers Association
The American Bankers Association is the voice of the nation’s $24 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19 trillion in deposits and extend $12.4 trillion in loans.
In addition, under federal law a depository institution could not be held liable or subject to asset forfeiture for providing a loan or other financial services to a legitimate cannabis-related business.
The bill provides that a federal banking agency may not request or order a depository institution to terminate a customer account unless (1) the agency has a valid reason for doing so, and (2) that reason is not based solely on reputation risk. Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.
Finally, the bill decreases the cap on the surplus funds of the Federal Reserve banks. (Amounts exceeding this cap are deposited in the general fund of the Treasury.)
