A Senate Banking Committee hearing on July 23 focused on a bipartisan bill that would protect lenders from federal liability when they provide accounts and other financial services to cannabis-related businesses (CRBs) deemed legal under state laws. The bill would also protect certain real estate transactions involving legitimate CRBs. (Senate Banking Committee, " Challenges for Cannabis and Banking: Outside Perspectives ")
Senate Banking Chairman Mike Crapo (R-ID) said at the hearing that “the case was made pretty strongly” that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry.
- The hearing featured testimony by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), co-sponsors of the Secure And Fair Enforcement (SAFE) Banking Act. Their bill (S. 1200) would provide a safe harbor to financial institutions serving CRBs, protecting them from federal money laundering laws.
- Senate Banking Chairman Mike Crapo (R-ID) said at the hearing that "the case was made pretty strongly" that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry. (BGov, July 23) Chairman Crapo reportedly "stopped short of endorsing a legal fix for banks that want to serve cannabis businesses, warning that major concerns he has about financial crimes and access to the drug still need to be addressed." (Politico Morning Money, July 24)
- For real estate: the SAFE Banking Act would protect sellers and lessors of real estate, and other "service providers," by clarifying that proceeds from transactions with legitimate CRBs do not derive from unlawful activity – and thus do not provide a predicate for federal criminal money laundering.
- The Real Estate Roundtable on April 30 urged the Senate Banking Committee leadership to hold hearings on the SAFE Act. Roundtable President and CEO Jeffrey DeBoer stated in the letter, "Without a bank account, dispensaries and other legal CRBs must operate on a cash basis. Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost. S. 1200 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within … states that have legalized marijuana to varying degrees." (Roundtable Policy Letter, April 30)
- Companion legislation in the House (H.R. 1595) was approved by the Financial Services Committee on March 27 by a 45-15 vote. A full House vote on the bill may occur after the upcoming summer recess. (Roundtable Weekly, April 26 and Forbes, July 23)
- At the July 23 Senate hearing, Banking Committee member Bob Menendez (D-NJ) discussed bipartisan legislation he introduced the day before – to ensure legal CRBs have access to comprehensive and affordable insurance coverage. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act would prohibit the federal government from taking any adverse action on an insurance policy held by an owner or operator of a CRB, or against real estate or equipment leased to a CRB, solely because the policy covers cannabis operations that a state deems legal. (Menendez news release, July 23)
Following the hearing, Chairman Crapo said the Committee is acting on the SAFE Banking Act. "We're looking at it to see if there's a solution to the various issues we're talking about." (BGov, July 23)