CBO Weighs-In on SAFE Banking Act, Will Increase Insured Deposits at Banks and CUs

CUNA and the state leagues support legislation that would allow credit unions and other financial institutions to serve these businesses, including both the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595; S.1200) and the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act (S.1028).

The legislation would prevent the NCUA and FDIC from taking action against credit unions or banks that serve cannabis-related businesses. In addition, it would prevent those regulators from limiting access to financial institutions by cannabis-related businesses.

The Congressional Budget Office (CBO) believes the bill will result in additional deposits credit unions and banks. CBO estimates that beginning in 2022 insured deposits at credit unions and banks will increase by about $200 million and $1.2 billion, respectively. By 2029, insured deposits will increase to $350 million and $2.1 billion at credit unions and banks.

However, CBO cautions that the lack of data on deposits from cannabis-related businesses at financial institutions means its estimates new deposits could be greater or smaller than predicted.

Gov. Phil Murphy last week joined sixteen other governors (as of this writing) in adding his name to a letter to Congress urging passage of legislation to enable financial institutions to provide banking services to state-licensed cannabis businesses. NJ Attorney General Gurbir Grewal and Commissioner of Banking and Insurance Marlene Caride added their names to similar peer letters in May.   

The House version of the SAFE Banking Act passed the House Financial Services Committee in March. The bipartisan bill currently has 206 cosponsors including eight from New Jersey, Reps. Donald Norcross (D-1), Jeff Van Drew (D-2), Tom Malinowski (D-7), Bill Pascrell, Jr. (D-9), Albio Sires (D-9), Donald Payne, Jr. (D-10), Mikie Sherrill (D-11) and Bonnie Watson Coleman (D-12). The Senate bill has 30 cosponsors including Sen. Bob Menendez (D-NJ).