BY ACM STAFF
This week members of the House of Representatives voted 321 to 103 in favor of HR 1595: The SAFE Banking Act, which explicitly amends federal law allowing banks and other financial institutions to work directly with state-legal marijuana businesses. This historic vote marks the first time ever either the House or the Senate successfully voted on a stand-alone piece of positive marijuana reform legislation.
The official summary of HR 1595 reads:
This bill generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate marijuana-related business. Specifically, the bill prohibits a federal banking regulator from (1) terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate marijuana-related business; (2) prohibiting or otherwise discouraging a depository institution from offering financial services to such a business; (3) recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder solely because the account holder is affiliated with such a business; (4) taking any adverse or corrective supervisory action on a loan made to a person solely because the person either owns such a business or owns real estate or equipment leased or sold to such a business; or (5) penalizing a depository institution for processing or collecting payments for such a business.
National NORML political director Justin Strekel calls the vote “a significant victory for the cannabis reform movement. For the first time ever, a supermajority of the House voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization.” The YES votes represented 99% of the Democratic majority caucus and 47% of the Republican minority caucus.
MITA-AZ founder Demitri Downing was among the many Arizonans thrilled by the news. “This is another step in a long journey that should’ve never occurred, but it’s important to recognize that the leadership driving the discussion at the federal level is now on both sides of the aisle. The marijuana industry trade association congratulates them.”
Background on HR 1595: The Safe Banking Act
Currently federal law defines all marijuana-related endeavors as federally criminal enterprises, including those commercial activities that are licensed and legally regulated under state laws. Therefore, according to IRS rule 280E, state-licensed cannabis businesses are not allowed to legally directly obtain a bank account, process credit cards, or provide loans to small businesses and entrepreneurs.
Even the largest multi-billion-dollar cannabis businesses must operate largely on a cash-only basis, which makes the entire industry more susceptible to theft and more difficult to audit. This cash-only approach also places these businesses’ customers at risk, as they must carry significant amounts of cash on their persons in order to make legal purchases at retail facilities.
The bill now heads to the Senate, where NORML is cautiously optimistic. Senate Banking Chairman Mike Crapo recently pledged his committee will hold a markup (a public hearing) on this issue.