Is 2021 The Year Of Meaningful Cannabis Banking Reform?

CANNANNEW REPORT

26 July 2021 by Jack Jacobson (Washington, DC) Thompson Coburn LLP With Democrats in control of the White House and Congress (at least until the 2022 midterm election), the question remains as to whether this is the year that the federal government enacts meaningful cannabis banking reform. As a refresher, in March 2019, the Secure and Fair Enforcement (SAFE) Banking Act, or H.R. 1595, was first introduced in the U.S. House of Representatives. That Act ultimately passed the House six months later by a vote of 321-103, but died in the Senate. The Senate Banking, Housing, and Urban Affairs held a hearing on the bill, but the Senate took no further action. A lot has changed in the legal cannabis market in the two years since the passage of H.R. 1595. As of July 1, 2021, recreational cannabis is now legal in 18 states and medical cannabis is legal in nearly 40 states and the District of Columbia. Since the majority of states now have a legal and regulated cannabis market, the need for banking reform has never been greater. In no other legal industry are businesses expected to operate on a cash-only basis for everything from inventory purchase to payroll to trash collection. In an effort to address these concerns, a new SAFE Banking Act (H.R. 1996) was introduced in the House on March 18, 2021, and subsequently passed by a vote of 321-101 only thirty days later. If the SAFE Banking Act becomes law, it will create protections for financial institutions that provide financial services to cannabis-related legitimate businesses, by preventing Federal banking regulators from the following: Terminating or limiting a depository institution’s access to deposit insurance or share insurance; Prohibiting, penalizing, or otherwise discouraging depository institutions from providing traditional banking services to a covered business; Recommending, incentivizing, or encouraging a depository institution not to offer…

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