Durbin, Duckworth, Colleagues Introduce Safe Banking Act To Improve Community Safety And Banking Access For Legal Cannabis Businesses

Bipartisan legislation would ensure that legal cannabis businesses can access critical financial services, increase public safety

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Tammy Duckworth (D-IL) joined U.S. Senators Jeff Merkley (D-OR) and Steve Daines (R-MT) to reintroduce the bipartisan Secure and Fair Enforcement (SAFE) Banking Act of 2023. This bill would ensure that legal cannabis businesses would have access to critical banking and financial services.  

Most state legal medicinal or recreational cannabis businesses are denied access to traditional and secure banking systems and financial services because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. Due to the lack of access to financial services, state legal cannabis businesses are forced to operate their businesses solely using cash. This reality doesn’t just open the door to potential tax evasion, but increases the potential of criminal activity. 

“Barring legal cannabis businesses from accessing traditional banking services only hurts our economy and puts unnecessary risk on small business owners,” said Durbin.  “The SAFE Banking Act protects cannabis business owners from being unfairly punished for their livelihoods and allows them to access services to protect their money and succeed in an increasingly thriving industry.” 

It's long past due that legal cannabis businesses have access to our banking and financial services,” said Duckworth. “Forcing our legal cannabis companies in Illinois to continue to operate as all-cash businesses is dangerous for workers, our communities and beyond. Furthermore, ensuring equity in cannabis licensing—which Illinois has put at the forefront of its legalization process—relies on access to basic financial services. I’m proud to support the SAFE Banking Act to help keep our communities safe and support our small businesses.”

To address the safety concerns resulting from state-sanctioned legal businesses being shut out of banking services, 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, for the first time, explicitly extends the safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) to ensure they can also serve cannabis businesses. CDFIs and MDIs serve underserved communities who face challenges in accessing capital and provide affordable access to financial services. 

The SAFE Banking Act would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies. 

The SAFE Banking Act?has passed the House seven times with strong bipartisan support.   

This legislation is cosponsored by U.S. Senators Jacky Rosen (D-NV), Bill Cassidy (R-LA), Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), Brian Schatz (D-HI), Lisa Murkowski (R-AK), Edward J. Markey (D-MA), Kevin Cramer (R-ND), Ben Ray Luján (D-NM), Dan Sullivan (D-AK), Catherine Cortez Masto (D-NV), Rand Paul (R-KY), Angus King (I-ME), John Fetterman (D-PA), Ron Wyden (D-OR), Kyrsten Sinema (I-AZ), Alex Padilla (D-CA), Peter Welch (D-VT), Mark Kelly (D-AZ), Michael Bennet (D-CO), Patty Murray (D-WA), Tina Smith (D-MN), Amy Klobuchar (D-MN), Elizabeth Warren (D-MA), Tim Kaine (D-VA), Debbie Stabenow (D-MI), Bernie Sanders (I-VT)Bob Menendez (D-NJ), Chris Coons (D-DE), John Tester (D-MT), Mark Warner (D-VA), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Mazie Hirono (D-HI), Gary Peters (D-MI), and Chris Murphy (D-CT).

Bill text can be found here.