'SAFE Banking Act' Moves to Senate after House Passes Bill

Capitol Hill

The House of Representatives has passed H.R. 1996, the SAFE Banking Act (Secure and Fair Enforcement), this week. It provides a safe harbor for depository institutions offering financial services to cannabis-related businesses.

The bill was considered under suspension of the rules, which means it required two-thirds of the House to pass it. With more than 320 bipartisan "yes" votes, the leigslation will advance (321-101 vote).

While the California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) never entered the debate on cannabis legalization, the trade associations have routinely supported a safe harbor to protect credit unions that serve this space.

The bill now moves to the Senate where its future is unknown. The White House and President Joe Biden's administration have not yet weighed into the future of the bill as written; however, they have acknowledged this is a continual problem. An identical bill passed the House last session.

The SAFE Banking Act was introduced last month by Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velázquez (D-NY), and Warren Davidson (R-OH). Specifically, it would provide a safe harbor for:

  • Financial institutions accepting deposits from, extending credit, or providing payment services to an individual, or business engaged in legal marijuana-related commerce.
  • Credit unions and their employees who are not aware if their members or customers are involved in such businesses.

The bill was also introduced last month in the Senate by a group of 30 senators (it had passed the House in 2019 in a historic vote).

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