A key U.S. House committee voted resoundingly Thursday to provide federal protection for financial institutions that serve state-authorized marijuana and ancillary businesses, a landmark development for cannabis banking legislation.
The House Financial Services Committee voted 45-15 to advance the bill, the Secure And Fair Enforcement (SAFE) Banking Act, after amending it to include provisions to provide a safe harbor for insurance companies and improve access of financial services to minority- and women-owned cannabis businesses.
The full House is expected to vote on the bill within weeks.
Banks generally balk at servicing the marijuana industry, leaving a large portion of state-legal businesses to operate on a cash-only basis, which creates security, money laundering and other criminal concerns.
“This is a historic and critical step forward for the nation’s burgeoning cannabis industry,” Steve Hawkins, executive director of the Marijuana Policy Project, said in a statement. “Regardless of where members stand on legalization, they can agree that it is in the public interest to make banking available to cannabis businesses in states where it is legal.
“We hope the full House will follow the committee’s recommendation and advance this important legislation.”
The chair of the U.S. House Rules Committee, which wields substantial power in determining which bills go to the floor, said Wednesday the full House will vote on the bill “in the next few weeks,” and he predicted it will pass.
“I think it will pass with an overwhelming vote, Democrats and a lot of Republicans as well,” Rep. Jim McGovern, a Massachusetts Democrat, told Boston Herald Radio.
The bill already had collected 152 co-sponsors in the House as of Thursday.
It’s unclear, however, whether the measure can pass the Republican-controlled Senate, or whether it will even be considered there.
Experts have said the banking issue vexing state-legal marijuana businesses is among the most likely to be resolved by Congress in the near term.
“The SAFE Banking Act would go a long way toward improving safety, transparency, access and justice in the cannabis industry,” Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement.
Financial industry groups such as the American Bankers Association and Credit Union National Association have come out in support of the bill, saying its members have found themselves in a difficult situation because of the conflict between state and federal law.
A version of the bill was first introduced six years ago, but finally received its first committee hearing last month under the new Democratic-controlled House.
The bill was originally introduced by Reps. Ed Perlmutter, a Colorado Democrat, Denny Heck, a Washington Democrat, Steve Stivers, a Republican from Ohio, and Warren Davidson, also an Ohio Republican.
Kevin Murphy, CEO of New York-based multistate operator Acreage Holdings, said in a statement that access to traditional banking services will have a “profound” positive economic impact in terms of creating jobs and tax revenues.
The measure would:
- Prevent federal banking regulators from punishing financial institutions that serve cannabis-related businesses that comply with state laws.
- Require the Financial Institutions Examination Council to develop within 180 days guidance and examination procedures for financial institutions that serve lawful cannabis businesses.
- Require federal banking regulators to issue an annual report to Congress that contains data on the availability of financial services to minority- and women-owned cannabis businesses as well as recommendations on how to expand those services.
Jeff Smith can be reached at [email protected]