Warner, Kaine Join Colleagues in Introducing Legislation to Improve Community Safety and Banking Access for Legal Cannabis Businesses
Bipartisan, bicameral SAFE Banking Act would ensure that legal cannabis businesses can access critical financial services, increase public safety
WASHINGTON, D.C. – U.S. Senators Mark R. Warner and Tim Kaine (both D-VA) joined a bipartisan, bicameral group of colleagues in introducing the Secure and Fair Enforcement (SAFE) Banking Act of 2023. The legislation would ensure that legal cannabis businesses have access to critical banking and financial services.
Most state legal medicinal or recreational cannabis businesses across the country are denied access to traditional and secure banking systems and financial services because banks fear they may be prosecuted under federal law given the current federal restrictions on cannabis. Due to the lack of access to financial services, legal state cannabis businesses are forced to operate solely using cash, which leaves to door open to potential tax evasion and increases the potential for criminal activity.
“No business operating legally and safely should feel the need to conduct their business in all-cash out of fear of unfair penalization from the federal government,” said Warner and Kaine. “It is about time we pass the SAFE Banking Act and ensure that all legal cannabis businesses have access to the financial services they deserve to support their businesses and keep their communities safe.”
Specifically, the SAFE Banking Act of 2023 would prevent federal banking regulators from:
- Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business);
- Terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business;
- Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
- Taking any action on a loan to an owner or operator of a cannabis-related business.
This legislation would also create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The bill also provides protections for hemp and hemp-derived cannabidiol (CBD) related businesses.
This legislation also explicitly extends the safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) ensuring they can also serve cannabis businesses. Sens. Warner and Kaine have long been supporters of CDFIs and MDIs. Last year, Sen. Warner launched the bipartisan Senate Community Development Finance Caucus to serve as a platform where policymakers can coordinate and expand on public and private-sector efforts in support of the missions of Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). Extending the safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) ensures that underserved communities are not once again excluded from opportunities to access capital and financial support for their businesses.