Wednesday evening, in a bipartisan vote of 321 to 103, the United States House of Representatives passed the Safe and Fair Enforcement (SAFE) Banking Act of 2019 – H.R. 1595. The banking industry supported SAFE Banking Act, if enacted, would provide a safe harbor for financial institutions serving stated licensed cannabis related businesses (CRB).
Although many states have legalized marijuana (cannabis), it remains illegal under federal law, specifically the Controlled Substances Act where it is listed as a Schedule I controlled substance. This discrepancy between state and federal law has resulted in banks unwilling to risk banking CRBs in violation of federal law, which leaves cash intensive CRBs with less access to secure methods of storing and managing their funds and increases the risk of tax evasion. H.R. 1595 would not change marijuana’s status as a Schedule I substance under the Controlled Substances Act; however, it would prohibit federal regulators from taking action against financial institutions for serving cannabis related businesses, helping to close the gap in laws for financial institution and decrease the risk of banking CRBs.
The next stop for the SAFE Banking Act is down the hall to the Senate chambers where its future is a bit hazy.