By Angela Underwood
It’s been five years since Rep. Ed Perlmutter (D-CO) introduced the Secure and Fair Enforcement (SAFE) Banking Act, and half a decade later his thoughts could become federal law.
If passed, the SAFE Banking Act of 2019 would protect medical and adult-use cannabis-based businesses from being prosecuted by the U.S. Department of Justice for the conflicting federal and state laws regarding the drug, which is still classified federally as a Schedule 1 substance under the Controlled Substance Act.
“I first introduced this legislation after Colorado had become one of the first states to legalize recreational adult-use marijuana,” Perlmutter told the New York Daily Weed Report of the act that passed the U.S. House Financial Services Committee in March by a 45-15 vote.
“It was clear to me without access to the banking system, these legitimate and legal businesses under state law were going to be forced to operate solely in cash, creating a significant public safety risk,” he added.
Perlmutter said he has every intention on watching his legislation become federal law, noting he’ll be present when House Majority Leader Steny Hoyer brings the SAFE Banking Act to the Washington Capitol floor.
“I have worked with House leadership, Chairwoman and Rep. Maxine Waters (D-CA), and the other original cosponsors of the bill Reps. Denny Heck (D-WA), Warren Davidson (R-OH) and Steve Stivers (R-OH) to advance this bill this year,” Perlmutter said.
Some of that work included tweaking the legislation along the way, according to the Colorado lawmaker.
“Compared to H.R. 2215 in the 115th Congress, the SAFE Banking Act of 2019 adds protection for ancillary businesses like real estate owners, accountants, and other vendors from money laundering and other laws as well as adjusts the tribal language and the definition of ‘cannabis-related legitimate business,’” Perlmutter said.
Since the bill passed the Financial Services Committee in March, there have been several technical changes made as well as a few other improvements, he added.
Now the SAFE Banking Act strengthens the safe harbor for insurance coverage provided to cannabis-related businesses, prohibits bank regulators from directing a bank to close an account for reputational reasons, extends the safe harbor to legitimate hemp-related businesses, and requires guidance from the Federal banking regulators for financial institutions that choose to serve hemp businesses.
Bottom-line the SAFE Banking Act is about public safety, accountability and respecting states’ rights, according to Perlmutter.
“Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs,” he said. “These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions.”
But more importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer, Perlmutter said.
There is no reason to wait any longer to pass the SAFE Banking Act, according to the Colorado representative.
“Voters in 47 states plus the District of Columbia – 97.7 percent of the population – have legalized some form of adult recreational and medical marijuana, including cannabidiol,” he said. “The majority of American voters have spoken.”
Their voice has states and localities across the country legalizing marijuana in their jurisdictions, said Perlmutter, adding “we need these businesses and employees to have access to the banking system.”
Along with House leadership, Perlmutter said he appreciates the support of a wide range of national organizations and state officials, including: 38 State Attorneys General, 18 State Banking Supervisors and 17 State Treasurers, the National Association of Attorneys General (NAAG), United Food and Commercial Workers (UFCW), Credit Union National Association (CUNA), Independent Community Bankers Association (ICBA);
America Bankers Association (ABA), Mid-size Bank Coalition of America (MBCA), Electronic Transaction Association (ETA), Law Enforcement Action Partnership (LEAP), The Real Estate Roundtable (RER), Safe and Responsible Banking Alliance (SARBA), American Land Title Association (ALTA), American Property Casualty Insurance Association (APCIA);
The Council of Insurance Agents and Brokers (CIAB), Reinsurance Association of America (RAA), Independent Insurance Agents and Brokers of America (Big “I”), Wholesale and Specialty Insurance Association (WSIA), Rural County Representatives of California (RCRC), Brinks, Inc., Minority Cannabis Business Association (MCBA), National Cannabis Industry Association (NCIA), National Cannabis Roundtable (NCR), National Organization for the Reform of Marijuana Laws (NORML), and the Cannabis Trade Federation (CTF).
However, all the help is to no avail if Washington does not pass the bill.
“Only Congress can provide the certainty financial institutions need to start banking legitimate marijuana businesses – just like any other legal business – and reduce risks for employees, businesses and communities across the country,” Perlmutter concluded.