H.R. 1996, the Secure and Fair Enforcement Banking Act of 2021, or the SAFE Banking Act, passed the House of Representatives on Thursday, July 14th, 2022, as an amendment to the FY 2023 National Defense Authorization Act (NDAA). The amendment, which was adopted by a vote of 277-150, prior to final passage of the NDAA, reverses current law and allows banks to provide services to cannabis businesses.
The ABA House of Delegates adopted a resolution in February 2020 to support the SAFE Banking Act. Even though it now has passed the House seven times, the legislation is not expected to be included in the Senate version of the NDAA. The provision was stripped from the FY 2022 defense authorization bill in conference last year, and the Senate has not acted on the stand-alone bill that the House passed in 2021.
The SAFE Banking Act aims to protect banking institutions—as well as their insurers—that choose to offer services to legitimate cannabis-related businesses operating in accordance with their respective state laws. The bill prevents federal banking regulators from imposing penalties on depository institutions that offer services to cannabis-related businesses. If enacted, transactions involving activities with a legitimate cannabis-related business would no longer be considered as generating proceeds from unlawful activities, and depository institutions would no longer be liable or subject to any federal law or regulation for providing services to the cannabis industry.
Passage of the SAFE Banking Act also would provide security for lawyers and firms advising companies in the industry. This will foster the rule of law by ensuring that those working in the state-legalized cannabis industry have access to counsel who are able to help prevent money laundering and other crimes associated with off-the-books cash transactions.
Please urge your Senators to support passage of S.910, the SAFE Banking Act this year. Join the ABA Grassroots Action Team at ambar.org/grassroots to access the digital tools to advocate easily and effectively on this and our other priority issues.