MONTH-IN-BRIEF (Apr 2021)
Banking Law
House of Representatives Passes the SAFE Banking Act
By James Morrissey, Pilgrim Christakis LLP
Although 37 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have legalized marijuana to some degree, it remains a Schedule I narcotic under the federal Controlled Substance Act—along with heroin, morphine, and mescaline. To address this yawning gap between state a federal law, on April 19th the House of Representatives passed the Secure and Fair Enforcement Banking Act of 2021 (or “SAFE Banking Act”) with a large bipartisan majority of 321 to 101. The purpose of the SAFE Banking Act is to ensure “access to financial services to cannabis-related legitimate businesses” that operate under state laws and reduce “the amount of cash at such businesses.” To that end, the Act broadly prohibits federal banking regulators from penalizing or discouraging banks and insurers for providing services to cannabis businesses or their suppliers. The SAFE Banking Act also exempts the proceeds of state-sanctioned cannabis businesses from federal anti-money laundering laws and insulates banks, insurers, their officers and employees from liability “pursuant to any Federal law or regulation.” The SAFE Banking Act is now under consideration by the Senate Committee on Banking, Housing, and Urban Affairs where a similar bill died in 2019 without a vote.
