The Independent Community Bankers of America (ICBA) have expressed support for bipartisan legislation authored by U.S. Reps. Ed Perlmutter (CO-07) and Denny Heck (WA-10) to allow cannabis-related businesses in states with existing regulatory structures to access the banking system. H.R. 2215, the Secure and Fair Enforcement Banking Act (SAFE Banking Act), ensures financial institutions can service cannabis-related businesses without the fear of reprisal from the federal government.
“As the voice of the community banking industry, ICBA’s support of H.R. 2215 is a meaningful step forward in the effort to pass legislation to align state and federal law as it relates to cannabis-related businesses,” said Perlmutter. “We need to allow financial institutions to provide services to legitimate and regulated cannabis businesses in order to ensure all small businesses and their employees are treated fairly – and most importantly, help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels.”
“The conflict between state and federal law on cannabis-related businesses has created significant legal and compliance concerns for financial institutions that could provide needed banking services to these companies,” ICBA President and CEO Rebeca Romero Rainey said. “This uncertainty has forced cannabis-related businesses to operate mostly in cash, which presents a significant public safety risk. The bipartisan Secure and Fair Enforcement Banking Act would help eliminate this risk in states where cannabis is already legal.”
Today, financial institutions who provide banking services to legitimate cannabis businesses are subject to criminal and civil liability for “aiding and abetting” a federal crime and money laundering under the Controlled Substances Act and federal banking statutes. The SAFE Banking Act removes uncertainty by providing “safe harbor” protections for depository institutions who provide a “financial product or service” to a covered business. For example, federal banking regulators would not be able to threaten or limit a bank or credit union’s federal deposit insurance, take any action or downgrade a loan made to a covered business, or force a depository institution to halt providing any kind of banking services to a cannabis-related legitimate business.
“Independent community bankers intimately know and respect their customers because they are also their neighbors. They know these businesses are in good standing with the law and the community and can be compliant financial actors,” said Heck. “Now is the time for more in the financial industry to follow their lead and back the bipartisan SAFE Banking Act, and effectively bridge the gap between state and federal law.”
Bipartisan support for the legislation continues to grow with 92 cosponsors currently of H.R. 2215 and a Senate companion bill (S. 1152). Earlier this year, a bipartisan group of 19 state attorneys general sent a letter to Congressional leaders urging the passage of H.R. 2215.
ICBA represents nearly 5,700 community banks of all sizes and charter types. To be clear, cannabis remains illegal at the federal level, and ICBA does not advocate its legalization.