A customer pays cash for retail marijuana at 3D Cannabis Center in Denver. The U.S House on Wednesday passed a bill that would protect banks that service cannabis businesses.
A MEASURE TO PROTECT financial institutions that service cannabis companies passed the House in a bipartisan vote Wednesday, becoming the first standalone marijuana reform bill to ever clear a chamber of Congress.
The legislation, if ultimately made into law, would protect financial institutions and ancillary firms that serve marijuana businesses from criminal prosecution and other consequences – a long-awaited move that would provide stability and security to the multi billion-dollar cannabis industry.
The measure, the Secure and Fair Enforcement Banking Act of 2019, passed the chamber by a vote of 321-103. Nearly all Democrats backed the bill as did 91 Republicans. It required a two-thirds majority to pass because it was voted on under a procedure that suspends House rules – a move that allows bills that enjoy broad but not unanimous support to be voted on quickly.
Eleven states and the District of Columbia have legalized the recreational use of marijuana, and a majority of states also have legal medical marijuana programs. But the drug remains illegal at the federal level, making banks and credit unions wary of doing business with the industry because of the threat of criminal prosecution and regulatory consequences. The SAFE Banking Act shields financial institutions who work with state and tribe-legal cannabis businesses from those consequences.
The bill moved out of the House Financial Committee in March and was sponsored by more than 200 lawmakers at the time of the vote. It is backed by a slew of national banking groups, including the American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America, which have pushed Congress to act on the issue for some time. The National Association for State Treasurers, a bipartisan group of more than 30 state attorneys general, and the governors of 20 states have urged Congress to pass the bill.
Cannabis trade groups, marijuana legalization advocates and human rights groups generally support the measure, though some rights groups voiced concern that the banking bill would get in the way of broader reforms and federal legalization.
"We applaud the House for approving this bipartisan solution to the cannabis banking problem, and we hope the Senate will move quickly to do the same," said Neal Levine, chief executive officer of the Cannabis Trade Federation, which lobbied in support of the bill. "This vital legislation will have an immediate and positive impact, not only on the state-legal cannabis industry, but also on the many communities across the nation that have opted to embrace the regulation of cannabis. Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance."
It's not clear what the measure's chances are in the Senate. The Senate version of the legislation is sponsored by 33 senators but hasn't yet made it out of committee. Sen. Mike Crapo, Idaho Republican and chairman of the Senate Banking Committee, told Politico he plans to mark up a cannabis banking measure in his committee before the year ends, though it may not be the banking bill that has already been introduced. It's not known if Senate Majority Leader Mitch McConnell of Kentucky would bring such a measure to a vote in the chamber.
