On September 27th, 2023, the Secure and Fair Enforcement Regulation Banking Act, or the SAFER Banking Act, passed the Senate Banking Committee, a monumental step toward the bill’s passage. This is the bill’s first time passing the Senate Committee, previously passing the House but failing to advance in the Senate.
Currently, cannabis businesses are extremely limited in their financial and banking abilities, with large financial institutions and federally chartered banks reluctant to bank with cannabis businesses. The Act would give cannabis businesses access to “deposit accounts, insurance, and other financial services” by providing a “safe harbor for banks, credit unions, other financial institutions, and payment processors” who provide financial services to state-licensed cannabis businesses. The bill protects financial institutions by “ensur[ing] that regulators cannot prohibit, penalize, or otherwise discourage depository institutions from serving” cannabis businesses, as well as protecting against criminal and civil prosecution. The Act also immunizes Federal Reserve Banks, Federal Home Loan Banks, and insurers.
Regarding hemp, the Act recognizes that “producers, manufacturers, and retailers [of hemp] have difficulty gaining access to bank accounts and insurance. It requires that no later than 180-days after enactment, the Federal banking regulators shall update guidance related to hemp-related businesses and service providers.”
Senate Majority Leader Chuck Schumer (D-NY), Senators Jeff Merkley (D-OR), Steve Daines (R-MT), Kyrsten Sinema (I-AZ) and Cynthia Lummis (R-WY) released the following statement on the bipartisan SAFER Act:
“We are pleased to introduce the Secure and Fair Enforcement Regulation (SAFER) Banking Act. This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans. It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk. We look forward to the markup of this bill in the Senate Committee on Banking, Housing and Urban Affairs on September 27th,” said the senators.
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