After Senate Banking Committee Chairman Mike Crapo (R-Idaho) raised concerns last month about the ABA-supported SAFE Banking Act, the American Bankers Association today responded to those concerns and urged him to advance the SAFE Banking Act or similar legislation on cannabis banking this year. Crapo’s concerns over the bipartisan bill included how it would affect public health and safety, legacy cash, money laundering and interstate commerce.
ABA emphasized that the SAFE Banking Act—which was passed by a strong bipartisan vote in the House last fall—is a “narrowly tailored” approach focused on getting state-sanctioned marijuana proceeds off the streets and into regulated financial institutions. “The SAFE Banking Act enjoys broad bipartisan support in large part because it eschews broader questions of cannabis regulation policy and instead focuses on the immediate practical needs that communities, law enforcement and banks face today,” ABA said. “Quick bipartisan action to pass the SAFE Banking Act would provide a safer and more responsible status quo from which to tackle the challenging non-banking questions outlined in your December memo.”
The SAFE Banking Act is not the right legislative vehicle to tackle public health issues related to cannabis, ABA said, noting that “any attempt to regulate the state cannabis industry through its banking relationships sets a dangerous precedent for using access to banking services as a method to control the behavior and activity of an unrelated industry.” Addressing Crapo’s concerns over money laundering, ABA said the bill would allow the Financial Crimes Enforcement Network to issue guidance that would minimize overreporting of cannabis-related transactions—in turn making suspicious activity reports more useful to law enforcement—and that would provide clarity on marijuana proceeds generated prior to the bill’s enactment.
ABA also noted that the SAFE Banking Act does not facilitate interstate cannabis commerce, focusing instead on proceeds from cannabis businesses legal at the state or local level. By separating the federal treatment of marijuana sales from the treatment of those sales’ proceeds, the bill makes it feasible for financial institutions to serve these firms. ABA’s letter also addressed the bill’s treatment of hemp financing and “Operation Choke Point.”