Six years soon after it was initially introduced, the Residence Monetary Solutions Committee released the most current draft legislation that would build a “safe harbor” for banks to serve the swiftly expanding cannabis business on February 7, 2019. Entitled the “Secure and Fair Enforcement Banking Act of 2019” (or, the “SAFE Banking Act of 2019”), the bill aims to prohibit federal regulators from penalizing banks and other economic institutions that offer banking solutions to marijuana enterprises, marijuana-associated enterprises, and their owners and workers.
As a reminder, thirty-3 states and the District of Columbia have legalized the sale and use of healthcare marijuana, when ten states and the District of Columbia have authorized marijuana for adult or recreational use. With the rapid-expanding acceptance of cannabis evident as ever, the bill’s supporters claim that it would offer sorely necessary legal clarity at a time when the cannabis business faces severe economic and safety dangers. Accompanying the draft legislation was a memorandum ready by the Monetary Solutions Committee, which explains the reasoning behind this renewed push for legislation:
An growing quantity of economic institutions have expressed interest in giving banking solutions to state authorized cannabis-associated enterprises as almost all states have authorized a variety of degrees of cannabis use, such as for healthcare use … Even so, several economic institutions are refraining from supplying banking solutions to these enterprises primarily based on quite a few legal and compliance dangers. … As such, cannabis-associated enterprises have been described as a “soft target” for getting robbed and assaulted, getting their retailers broken into, and their plants stolen” (citations omitted).
Commonly, this iteration of the Secure Banking Act pushes for even higher protections than these integrated in prior versions by which includes some new provisions, which includes:
1. Identifies (for the very first time) and adds protections for ancillary enterprises giving merchandise or solutions to cannabis-associated genuine enterprises (this is big due to the fact even banks that would pick out not to offer solutions to cannabis enterprises may possibly get caught beneath the present scheme)
two. Adds protections for marijuana-associated “retirement plans or exchange traded funds” and “the sale or lease of genuine or any house [and] legal or other licensed solutions … relating to cannabis”
four. Specifies how enterprises on tribal land could qualify and
five. Calls for that the Federal Monetary Institution Examination Council create guidance to assist economic institutions lawfully serve cannabis-associated genuine enterprises.
The common goal and directive of the Secure Banking Act is arguably summarized by the following catch-all provision:
[P]roceeds from a transaction performed by a cannabis-associated genuine small business shall not be regarded as proceeds from an unlawful activity solely due to the fact the transaction was performed by a cannabis-associated genuine small business.”
The bill is authored by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH), who have indicated that they strategy to re-introduce the Secure Banking Act by the finish of the month. The House Subcommittee on Customer Protection and Monetary Institutions has currently held hearings, which look to have gone nicely. Searching ahead, it is most likely that the Residence Monetary Solutions Committee will also hold a hearing and potentially mark up the bill. Primarily based on the Secure Banking Act’s reception, and with so several other cannabis-associated troubles on the table, we could be seeing a a great deal extra expansive bill to finish federal cannabis prohibition for excellent in the close to future.