Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

U.S. House of Representatives (again) Approves Cannabis Banking Reform Bill

Author: Daniel T. McKillop

Date: October 11, 2021

Key Contacts

Back
U.S. House (Again) Approves Cannabis Banking Reform Bill

The U.S. House of Representatives recently approved the Secure and Fair Enforcement (SAFE) Banking Act...

The U.S. House of Representatives recently approved the Secure and Fair Enforcement (SAFE) Banking Act. This is the fifth time the House has approved the cannabis banking reform bill since it was first introduced in 2019. This time around, the SAFE Banking Act passed as part of the National Defense Authorization Act.

Key Provisions of SAFE Banking Act

As discussed in greater detail in prior articles, the SAFE Banking Act seeks to improve access to financial services for legal cannabis businesses. Because marijuana remains illegal under the Controlled Substances Act (CSA), financial institutions providing banking services to legitimate and licensed cannabis businesses under state laws can face criminal prosecution under several federal statutes, such as “aiding and abetting” a federal crime and money laundering. In light of the liability risks, many banks are hesitant to provide services to the cannabis industry. As a result, cannabis businesses must deal exclusively in cash, which can make them targets for robberies and other types of crime.

The SAFE Banking Act seeks to increase access to financial institutions for legal cannabis businesses. Specifically, the bill would prevent federal banking regulators from:

  • Prohibiting, penalizing, or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a vendor or landlord providing services to a legal cannabis business);
  • Prohibiting, penalizing or discouraging an insurer from providing insurance products to a legitimate, state-sanctioned and regulated cannabis business, or an associated business (such as a vendor or landlord providing services to a legal cannabis business);
  • Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
  • Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
  • Taking any action on a loan to an owner or operator of a cannabis-related business.

The federal cannabis banking reform bill also creates a safe harbor from criminal prosecution and liability, as well as asset forfeiture, for banks who provide financial services to legitimate, state-sanctioned cannabis businesses. At the same time, it also preserves banks’ right to choose not to offer those services. The protections of the SAFE Banking Act also extend to hemp and hemp-derived CBD-related businesses.

What’s Next?

The Senate must now approve the SAFE Banking Act, which has proven to be a significant challenge in the past. Nonetheless, Sen. Jeff Merkley (D-OR), who is sponsoring the SAFE Banking Act in the Senate, expressed hope that his chamber would also pass the measure as part of the larger National Defense Authorization Act. “I’m hoping we can have similar success in the Senate,” he said. “This is a moment. The House has acted once again to push for this to be successfully passed in the counterpart in the Senate, or to get it done in conference with the House language.”

There are still hurdles for the Senate to approve the SAFE Banking, including members of Sen. Merkley’s own party that are pushing for comprehensive cannabis reform rather than more incremental cannabis banking legislation. With the Senate effectively split 50-50, sponsors will need to convince several Republicans or all of the Democrats to get on board.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, Teddy Eynon, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2 post image

What to Do If You Are Impacted by a Retailer Bankruptcy Part 2

Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]

Author: Brian D. Spector

Link to post with title - "What to Do If You Are Impacted by a Retailer Bankruptcy Part 2"
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business post image

The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business

Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]

Author: Dan Brecher

Link to post with title - "The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business"
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1 post image

Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1

The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]

Author: Brian D. Spector

Link to post with title - "Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1"
How Understanding Bankruptcy Trends Can Benefit Your Business post image

How Understanding Bankruptcy Trends Can Benefit Your Business

The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]

Author: Brian D. Spector

Link to post with title - "How Understanding Bankruptcy Trends Can Benefit Your Business"
SEC Takes Actions Against Issuers for Failure to File Form D post image

SEC Takes Actions Against Issuers for Failure to File Form D

In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]

Author: Kenneth C. Oh

Link to post with title - "SEC Takes Actions Against Issuers for Failure to File Form D"
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: