Monday marks the 10-year anniversary of the first filing of a congressional marijuana banking bill that’s now known as the Secure and Fair Enforcement (SAFE) Banking Act—a milestone that comes as lawmakers prepare once again to try and advance the reform in what they hope will be the final push needed to enact it into law.
The cannabis banking legislation has evolved significant since its first introduction in the 113th Congress in 2013, when it was sponsored by former Rep. Ed Perlmutter (D-CO) and titled the Marijuana Businesses Access to Banking Act. It’s grown from seven to 38 pages as the prospects of enactment increased and experts in the financial services industry helped take what was effectively a messaging bill upon its initial introduction and revised its provisions to give it more practical impact.
The country’s first adult-use marijuana retailers weren’t even open when the legislation was first filed. But with 23 states now having legalized cannabis—and the vast majority having medical marijuana programs in place—bipartisan lawmakers have worked to convey the urgency of passing the bill for the growing industry.
On the House side, the SAFE Banking Act has been approved in some form seven times over recent sessions. In the current Congress, the Senate is taking the lead, with Majority Leader Schumer (D-NY) planning for action during this upcoming summer work session. It must first move through the Senate Banking Committee, where it received a hearing in May, before potentially advancing to the floor.
When the first standalone version was filed, it was fairly straightforward, simply stipulating that federal regulators could not penalize financial institutions based solely on the fact that they provide services to state-licensed cannabis businesses. It also contained language on granting legal immunity to those institutions for servicing the industry.
It’s since grown from having six sections to 15, with the same fundamental purpose intact but also with additional guidance, separate protections for banks that work with hemp businesses, federally backed mortgage loan protections and requirements for reports on diversity in the market as well as on the efficacy of suspicious transaction reports.
Importantly, the number of cosponsors has also increased as more Republican lawmakers have joined their Democratic colleagues in supporting the legislation. The first House bill ended the 113th Congress with 32 cosponsors, only three of whom were Republican. There was no Senate version that session.
The House version this year for the 118th Congress, since being filed in April, has garnered 59 cosponsors so far, including 16 Republicans. And on the Senate side, there are 40 cosponsors—nearly half of the chamber that includes seven GOP senators and three independents.
The number of cosponsors has gradually increased in recent months, so it’s expected that more members will join on as it advances. In the prior 117th Congress, the final total of House cosponsors was 180 (26 Republicans), more than one-third of the chamber’s membership. The Senate version finished with 42 cosponsors.
At its peak in the 116th Congress, the House bill had 206 cosponsors. The Senate companion was lower, with 34 members signed on. That session, House Democrats also attached the cannabis banking measure to a coronavirus relief package, but it was not ultimately included in the final bill negotiated with the Senate. SAFE Banking found the same fate when the House put it in the National Defense Authorization Act (NDAA) last year, only to have it stripped out following bicameral talks.
“In an era of extreme Congressional polarization, it is remarkable that ten years after its introduction, one of the most bipartisan packages on Capitol Hill is on cannabis reform,” Justin Strekal, founder of the BOWL PAC, told Marijuana Moment. “It is crucial that reform efforts such as ‘SAFE-Plus’ balance both industry and individual interests to promote a thoughtful foundation for comprehensive reform in the future.”
(Disclosure: Strekal supports Marijuana Moment’s work through a monthly pledge on Patreon.)
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There’s considerable optimism that the SAFE Banking Act will pass this Congress, although that possibility may hinge on the extent to which Democratic members seek to expand the legislation.
“The ten year anniversary of the first introduction of the SAFE Banking Act is an inauspicious one,” Morgan Fox, political director of NORML, told Marijuana Moment. “It is frustrating that after such a long time—and after this narrowly-tailored commonsense reform has been repeatedly approved in the people’s chamber—its forward movement in the Senate remains in question.”
“I am incredibly grateful for the ongoing efforts of the bill sponsors and supporters, but I’m also plagued by the thought of what could have been had this passed years ago,” he said. “How many people have been hurt or traumatized by avoidable robberies? How many small businesses have gone under, or had their employees find themselves unable to obtain housing or loans? These questions are particularly troubling to me because so many of the impediments to passage are based on politics, not policy.”
The Senate majority leader has said on several occasions that he wants to attach language to facilitate expungements for prior cannabis convictions when the measure reaches the floor. And the GOP sponsor, Sen. Steve Daines (R-MT), is “open” to that, a staffer told Marijuana Moment, but he’s also cautioned that the bill could be tanked if Democrats seek to significantly revise it.
In a Dear Colleague letter that was distributed to lawmakers on Sunday, Schumer said that the bill will be among his bipartisan priorities in the upcoming work session—but he notably did not include his usual refrain about the need to attach criminal justice reform provisions like expungements. He also noted that passing the legislation, in addition to other measures, “will not be easy,” emphasizing the need for Republican support.
Ten years after the first version was filed, advocates and stakeholders are standing by in hopes that the job actually gets done this Congress.
Meanwhile, members of the Senate Banking Committee are also still debating Section 10 of the marijuana bill, which certain Democrats like Sen. Jack Reed (D-RI) have voiced concern over, arguing that it would effectively undermine banking regulations outside of the cannabis space. That section was not included in the original 2013 bill; it was first added in in the 116th Congress in 2019.
Schumer also recently spoke with a cannabis industry leader who approached him at an unrelated event last month, and according to that entrepreneur, the Senate leader is feeling “confident” about the prospects of passing the cannabis banking bill.
While the SAFE Banking Act has yet to be scheduled for a committee markup, lawmakers from across the aisle have signaled that the votes are there for passage—so long as there are no major contentions or hiccups along the way, as Daines suggested.
Sen. Tommy Tuberville (R-AL) said last month that he’s a “yes” on the legislation. He just doubts that Democratic leadership will follow through on their pledge to get the job done this year.
Democrats would likely contest that characterization. Senate Banking Committee Chairman Sherrod Brown (D-OH) said last month that he wants to hold a vote on it “in the next two or three weeks.”
Others have also floated other changes that they’d like to see incorporated into the cannabis bill such as expanding protections to free up marijuana industry access to all forms of financial services, including representation on major U.S. stock exchanges.
That request has faced some criticism from other advocates who say that would be an inappropriate move to help businesses while efforts to legalize marijuana stall in Congress.
A major cannabis lobbying firm apologized in May after sending a letter to Senate Banking Committee leadership concerning the banking bill that contained “inappropriate” references to investments from China in a “misguided attempt” to push for amendments expanding the legislation.
Sen. Jacky Rosen (D-NV) also recently said that she wanted the SAFE Banking Act to pass with an amendment allowing cannabis businesses to access federal Small Business Administration (SBA) services.
In April, Schumer said that he was “disappointed” that a so-called SAFE Plus package of cannabis reform legislation didn’t advance last year, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.
The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is a lead sponsor of the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
The American Bankers Association (ABA) also recently renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.