Cannabis Banking Bill Reintroduced In U.S. Congress With Broad Bipartisan Support From More Than 100 Lawmakers

A bill to protect banks that service state-legal marijuana businesses from being penalized by federal regulators has again been filed in the House.

Rep. Ed Perlmutter (D-CO) reintroduced the legislation, titled the Secure and Fair Enforcement (SAFE) Banking Act. The measure cleared the House along largely bipartisan lines during the last Congress, but it did not advance in the Senate under Republican control.

With Democrats now in control of the House, Senate and White House, industry stakeholders are optimistic that the legislation stands a solid chance of becoming law this year.

The bill as introduced has 102 initial cosponsors, with Reps. Steve Stivers (R-OH), Nydia Velazquez (D-NY) and Warren Davidson (R-OH) taking the lead alongside Perlmutter. By the end of the 116th Congress, the prior version of the bill garnered 206 cosponsors. The current bill includes support from 13 Republicans.

A new companion Senate version of the bill is expected to be filed next week.

The SAFE Banking Act would ensure that financial institutions could take on cannabis business clients without facing federal penalties. Fear of sanctions has kept many banks and credit unions from working with the industry, forcing marijuana firms to operate on a cash basis that makes them targets of crime and creates complications for financial regulators.

The bill has been slightly revised this session to expand banking protections to explicitly include hemp and CBD businesses, and some technical changes were made to clarify language around insurance and safe harbor provisions. A separate bill to address insurance issues in the cannabis market was also introduced in the Senate on Thursday.

“Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long,” Perlmutter said in a press release. “It is time to enact SAFE Banking to align federal and state laws and reduce the public safety risk in our communities.”


“I appreciate the partnership of the cannabis industry and businesses across this country who have added their voice to this effort,” he added. “The SAFE Banking Act is an important first step to treating cannabis businesses like legal, legitimate businesses and beginning to reform our federal cannabis laws.”


Stivers said that “we have a responsibility to legislate for the reality we live in, and the reality is that legal businesses in thirty-three states, including Ohio, are being denied access to the banking system and forced to assume huge risks as a result of operating solely in cash.”

Velazquez added that “the cannabis industry has been operating with great success, with many of these businesses deemed essential as the coronavirus pandemic took hold.”

“However, without the ability to safely utilize the banking system, cannabis-related businesses are left behind and stuck resorting to tactics that can threaten public safety and economic success,” she said.


As more states have legalized marijuana for recreational or medical use, banks have relied on 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that requires them to submit suspicious activity reports if they elect to provide financial services to cannabis businesses. In the years since, the number of depositories taking on marijuana clients has gradually increased—until a more recent downward trend that now seems to be stabilizing.

The head of the Internal Revenue Service (IRS) told Congress last month that the federal agency would “prefer” for state-legal cannabis firms to be able to pay taxes electronically, as the current cash-based system under prohibition is onerous and presents risks to workers.

Former Treasury Secretary Steven Mnuchin similarly said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue, and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.

In addition to being approved as a standalone bill in 2019, the SAFE Banking Act also passed in the House after leadership attached its language to two pieces of coronavirus relief legislation last year. But they declined to add it to their latest version signed into law by President Joe Biden this month, despite having reclaimed the majority in both chambers and the White House.