Monday marks the 10th anniversary of the first submission of a federal marijuana banking bill, now called the Secure and Fair Enforcement Banking Act (SAFE). This milestone comes as legislators prepare to once again try and advance this reform in their final push to make it law.
Cannabis banking legislation has changed significantly since its initial introduction in the 113th Congress of 2013, when it was introduced by former Rep. Ed Perlmutter, D-CO and titled Marijuana Businesses Access to Banking Act. The bill has grown from seven pages to 38 as the chances of it being enacted increased. Experts in the financial industry have helped to take what was essentially a message bill at its first introduction and revise its provisions to make it more practical.
When the bill was filed, there were no adult-use marijuana stores in existence. Bipartisan legislators have worked to convince the public that the industry is growing rapidly, especially since 23 states have legalized marijuana and the majority of them also offer medical marijuana programs.
The SAFE Banking Act was approved seven times in the House during recent sessions. The Senate has taken the lead in the current Congress. Majority Leader Schumer is planning action for this summer’s work session. Before it can be considered for the Senate floor, the bill must pass through the Senate Banking Committee .
“After ten long years, it may be possible to finally see hope that the Senate will do what the House did seven times, namely pass this bipartisan, commonsense legislation which will save lives and livelihoods,” said Rep. Earl Blumenauer, D-OR, who is the leading Democratic co-sponsor for the most recent version of the House bill. The SAFE Banking Act has been long overdue.
The first standalone version that was filed was pretty straightforward. It simply stated that federal regulators couldn’t penalize financial institutions solely because they provided services to state-licensed marijuana businesses. The bill also included language granting immunity to financial institutions that service the cannabis industry.
Since then, it has grown from six sections to fifteen, with the same basic purpose, but with additional guidance. Separate protections are provided for banks who work with hemp businesses. Federally-backed mortgage loan protections. And requirements for reporting on diversity of the market, as well as the effectiveness of suspicious transaction reports.
The number of co-sponsors also increased, as more Republican legislators joined their Democratic counterparts in supporting the legislation. In the end of the 113th Congress, 32 House members co-sponsored this first bill. Only three were Republicans. The Senate did not pass a version of the bill during that session.
Since April, the House version for this year’s 118th Congress has gathered 59 cosponsors, including 16 Republicans. On the Senate side there are 40 sponsors, which is nearly half the chamber. This includes seven GOP Senators and three Independents.
It’s likely that as the bill moves forward, more cosponsors will sign on. The previous 117th Congress had 180 House cosponsors (26 Republicans) which was more than a third of the chamber. The Senate version had 42 cosponsors.
The House Bill reached its highest point in the 116th Congress with 206 cosponsors. Senate , the companion to this bill, had a lower number of signatories with only 34. The House Democrats attached the cannabis banking measure along with a coronavirus package during that session. However, it was not included in the final bill, which was negotiated by the Senate. SAFE Banking suffered the same fate last year when the House included it in the National Defense Authorization Act, only for it to be removed after bicameral negotiations.
Justin Strekal of the BOWL PAC told Marijuana Moment that in an era of extreme Congressional polarization it was remarkable that ten year after its introduction one of the most bipartisan package on Capitol Hill is cannabis reform. It is important that reforms such as SAFE-Plus balance industry and individual interest to promote a thoughtful basis for comprehensive reforms in the future.
Disclosure: Strekal is a supporter of Marijuana Moment through a pledge per month on Patreon.
Marijuana Moment tracks more than 1,000 cannabis and drug policy bills that have been introduced in state legislatures, and Congress. Patreon supporters who pledge at least $25/month gain access to our interactive charts, maps and hearing calendar.
Discover more about our marijuana bills tracker. Become a Patreon supporter to gain access.
—
The SAFE Banking Act is expected to pass in this Congress. However, the success of the bill may depend on how far the Democratic members want to take it.
Morgan Fox, the political director at NORML told Marijuana Moment that the ten-year anniversary of the SAFE Banking Act’s first introduction is not a good one. It is frustrating that, after so much time and after this commonsense reform was repeatedly passed in the Senate chambers by the people of the United States, its progress remains in doubt.
He said: “I’m grateful to the sponsors and supporters of the bill for their efforts, but also haunted by what might have happened if this had been passed years earlier.” How many people have been injured or traumatized in avoidable robberies?” How many small business owners have failed, or their employees found themselves unable obtain housing or loans. These questions are especially troubling because many of the obstacles to passage are based upon politics and not policy.”
Sen. Steve Daines (R-MT), the GOP sponsor, is “open” to that. The GOP sponsor, Senator Steve Daines (R -MT), has said that he is “open” to this, a Marijuana Moment staffer reported. However, he also warned that the bill might be sunk if Democrats attempt to make significant changes.
Schumer stated in a Dear Colleague note that the bill would be one of his priorities for the next work session. However, he did not mention his usual refrain that criminal justice reform measures like expungements must be attached. Schumer also said that, along with other measures, passing the legislation “will not easy” and stressed the need for Republican backing.
Advocates and stakeholders have been waiting ten years for the first version to be filed in the hope that this Congress will actually get the job done.
Members of the Senate Banking Committee are still debating section 10 of the marijuana law. Certain Democrats, like Sen. Jack Reed, have expressed concern about this section, arguing it would undermine banking regulations in the cannabis industry. This section was not in the original bill of 2013, but was added to it in the 116th congress in 2019.
Schumer also recently spoke to a cannabis industry leader, who approached him last month at an event unrelated. According to the entrepreneur, Schumer is “confident” that the cannabis banking bill will pass.
The SAFE Banking Act is yet to receive a committee review, but lawmakers on both sides of the aisle have indicated that they are ready to pass it, so long as there aren’t any major disagreements or problems along the way.
Last month, Sen. Tommy Tuberville (R-AL), said that he was a “yes”. He doubts the Democratic leadership’s ability to deliver on their promise.
Democrats are likely to contest this characterization. Sherrod Brown, the chairman of the Senate Banking Committee (D-OH), said last month he wanted to vote on it in “the next two or three week.”
Other people have suggested other changes they would like to see included in the cannabis bill, such as expanding protections for marijuana industry access all forms of financial service, including representative on major U.S. Stock Exchanges.
Other advocates have criticized the request, saying that it would be inappropriate to assist businesses at a time when efforts to legalize cannabis in Congress are stalled.
In May, a major cannabis lobbying company apologized for sending a letter to the Senate Banking Committee’s leadership regarding the Banking Bill . The letter contained “inappropriate references about investments from China as a “misguided” attempt to push for amendements expanding the legislation.
Jacky Rosen, a Nevada senator, said recently that the SAFE Banking Act should be passed with an amendment to allow cannabis businesses access to federal Small Business Administration services (SBA).
The legislators will continue “to work in a bipartisan manner” in order to accomplish the task.
In the first months of the new Congress, the majority leader has met with Democratic members and Republican members to discuss marijuana reform proposals which might be able to garner bipartisan support this year.
Sen. Cory Booker, D-NJ, said that lawmakers are working to “resurrect the cannabis reform package. He acknowledged that the failure to advance an industry banking solution “literally” means hundreds of businesses will go out of business.
Rep. Earl Blumenauer, D-OR, who is the lead sponsor of the House’s version of the SAFE Banking Act said that it was important for advocates and legislators to align on any incremental proposal to end the war on drugs, cautioning against an “all or nothing” mentality.
The American Bankers Association (ABA), which also renewed its call for passage, did the same. All 50 state chapters of the ABA did the same. Insurance and union organizations also wrote to Congress.
Connecticut Marijuana sales reach new high of $24 million in June, for a total of $122 million in the first six months of recreational sales
