Earlier this week, members of the U.S. House of Representatives and U.S. Senate reintroduced legislation that would allow regulated financial institutions to work with state-licensed cannabis companies. The Secure and Fair Enforcement (SAFE) Banking Act of 2023 would disallow federal banking authorities from prohibiting, penalizing, or discouraging banks from providing financial services to state-licensed cannabis businesses and their networks of counterparties, advisors, and vendors.
Although similar legislation has been introduced—and failed to move forward—in previous Congresses, SAFE continues to enjoy broad bipartisan support. The bill was sponsored by Senators Jeff Merkley (D-OR) and Steve Daines (R-MT) and Representatives Dave Joyce (R-OH) and Earl Blumenauer (D-OR). It is cosponsored by 38 senators and eight representatives. Past attempts have passed the U.S. House seven times, but none have reached the Senate floor.
Prior iterations of the SAFE legislation have included a safe harbor provision, walling off financial institutions and their employees from criminal prosecution and liability, and asset forfeiture for banking licensed cannabis businesses. The reintroduced legislation expands that safe harbor to cover Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), a notable development given the degree to which CDFIs and MDIs serve underbanked communities.
The sponsors of the legislation are hopeful that this time will be different and that SAFE can overcome legislative hurdles. In a public statement, Senator Merkley commented, “For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate.”