BILL: Should Banks Offer Service to Marijuana Businesses? - SAFE Banking Act of 2023 - S.1323

The Bill

S.1323 - SAFE Banking Act of 2023

Bill Details

• Sponsored by Sen. Jeff Merkley (D-Ore.) on April 26, 2023
• Co-sponsored by over 40 lawmakers with bipartisan support
• Committee: Senate - Banking, Housing, and Urban Affairs
• House: Not yet passed
• Senate: Not yet passed
• President: Not yet signed

Bill Overview

• The bill, the Secure and Fair Enforcement Banking Act of 2023, provides protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses and prevents federal banking regulators from penalizing these depository institutions.
• Currently, most financial institutions do not provide services to state-sanctioned marijuana businesses due to the federal classification of marijuana as a Schedule I controlled substance. 

What's in the Bill?

Makes banking services more accessible for the legal cannabis industry

• Makes it easier for financial institutions to offer services like bank accounts and small business loans to companies in the legal cannabis industry.
• Addresses the needs of the industry, which is cash-dependent and subject to frequent robberies and break-ins. Offering these businesses banking services would increase community safety by reducing their reliance on cash.

Prevents regulators from penalizing financial institutions

• Regulators would not be allowed to terminate or limit the deposit or share insurance of a depository institution solely because the institution provides financial services to a state-sanctioned marijuana business.
• Prohibits regulators from requesting or ordering a depository institution to terminate a customer account unless the regulator has determined that the depository institution is engaging in an unsafe or unsound practice or is violating a law.

Recognizes the legality of state-sanctioned marijuana businesses

• Proceeds from a state-sanctioned marijuana business will no longer be considered profits from unlawful activity. 

Protects financial institutions from liability

• Financial institutions, insurers, or federal agencies may not be held liable or subject to asset forfeiture under federal law for providing a loan, mortgage, or financial service to a state-sanctioned marijuana business.

What Supporters Are Saying

• Sen. Patty Murray (D-Wash.):

“It makes absolutely no sense that legal cannabis businesses in states like Washington are forced to operate entirely in cash—and it’s dangerous to their employees, their businesses, and our neighborhoods. This bipartisan legislation would bring legal cannabis businesses into the formal banking system, where they belong—making our communities safer and providing much-needed relief to these small businesses and their customers."

• Sen. Merkley said:

“Let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses, and their communities safe.”

What Opponents Are Saying

• Senate Republican leader Mitch McConnell (R-Ky.) said:

"We’re talking about a grab bag of miscellaneous pet priorities, like making our financial system more sympathetic to illegal drugs." 

• Rasul Raheem, senior counsel at the law firm Dykema Gossett, said:

“I don’t see the big banks getting into this area, you’ll mostly see the smaller banks."

Tell your reps to support or oppose this bill

—Emma Kansiz 

(Photo Credit: Canva)