Olive Lundegaard September 18, 2019
The Secure and Fair Enforcement (SAFE) Banking Act was first introduced in 2013 by Representative Ed Perlmutter (D-Colorado) after Colorado became one of the first states to fully legalize adult recreational use because a misalignment with federal and state laws created a public safety risk. An estimated $1.5 billion a year is circulated in the marijuana industry in Colorado in all cash. Banks refuse this money over fear of regulatory action or federal forfeiture of insurance. This creates a risk of extremely high amounts of cash being exchanged with no regulating.
The federal Financial Crimes Enforcement Network issued guidelines in 2014 in an attempt to make financial services available for legally operating marijuana businesses. However, most financial institutions still refuse to provide these businesses with bank accounts and other financial services that other businesses use. Similarly, Visa and MasterCard refuse to provide access to credit card transactions to legally operating marijuana businesses. As a result, many of these businesses operate as either “cash only,” or pay high fees to local banks.
The SAFE Banking Act was recently introduced in both the Senate and the House of Representatives and received bi-partisan support. If passed, the bill would protect financial institutions that work with legally operating marijuana companies from prosecution.
Senator Cory Gardner (R-Colorado), a co-sponsor of the bill, believes that improving banking for legally operating marijuana businesses is something both parties should agree on. While testifying at the Senate Committee on Banking, Housing, and Urban Affairs, Gardner said, “This disconnect between federal and state marijuana laws has become, as the Attorney General has testified, both “intolerable” and “untenable.”
“At a time when all the talk is about how divided we are in our country, we are remarkably united on this issue,” Gardner said.
The SAFE Banking Act was referred to the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security, was passed by the House Financial Committee in March 2019, and is expected to be voted on in the House later this month.