SAFE Banking Act Needed as Public Safety Measure

As Congress returns from its August recess, one of CUNA’s and the state leagues’ top legislative priorities is advancing the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595/S. 2100), a bill that would provide protections to financial institutions serving legal cannabis-based businesses. Leagues and credit unions highlighted the bill during their summer advocacy meetings with lawmakers, and with Congress back in session, CUNA will continue its engagement.

Specifically, the SAFE Banking Act would:

  • Offer narrowly targeted federal protections for credit unions and other financial institutions accepting deposits, extending credit, or providing payment services to an individual or business engaged in cannabis related commerce in states where such activity is legal with a safe harbor, so long as they are compliant with all other applicable laws and regulations; and
  • Provide safe harbor to credit unions and their employees who are not aware if their members or customers are involved in this business.

CUNA and the state leagues have not taken a position on the legalization of marijuana but have called on Congress to provide protections for credit unions that serve such businesses in states where marijuana is legal for medicinal or recreational purposes. The lack of access to traditional banking services poses a public safety risk to communities where cannabis businesses operate.

CUNA has testified before both the House Financial Services Committee and Senate Banking Committee in support of the SAFE Banking Act.

In addition to Congressional testimony, CUNA has detailed the need for the SAFE Banking Act in letters to multiple Congressional committees, including with the American Association of Credit Union Leagues and state leagues.

CUNA has also spoken to Forbes, written in The Hill and submitted an op-ed with the American Bankers Association, all illustrating the need for Congressional action.

Over the summer CUNA connected with state legislators at events like the National Conference for State Legislators to garner support for the bill.

Eighteen state and two territorial governors added their names to a letter urging Congress to pass legislation to enable financial institutions to provide banking services to state-licensed cannabis businesses. Gov. Phil Murphy was among the twenty signatories on the letter sent to U.S. Senate and U.S. House leadership, and the chairs and ranking members of the Senate Banking and House Financial Service committees. 

NJ Attorney General Gurbir Grewal, NJ Commissioner of Banking & Insurance Marlene Caride and NJ State Treasurer Elizabeth Maher Muoio have also added their names to colleague letters sent to Congress. 

The House version of the Secure And Fair Enforcement Banking Act of 2019, or SAFE Banking Act (H.R.1595) passed the Financial Services Committee in March with a bipartisan 45-15 vote. The measure 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 SAFE Banking Act (S.1200) has 31 cosponsors including Sen. Bob Menendez (D-NJ).

Menendez has also introduced the Clarifying Law Around Insurance of Marijuana, or CLAIM Act (S.2201) to address concerns of insurance providers.  

Medicinal marijuana is legal in New Jersey. While efforts to legalize recreational use stalled earlier this year, there is some indication the legislature may revisit it before year’s end. Gov. Murphy has been a vocal supporter of legalizing adult recreational use of marijuana and is expected to sign the legislation if it reaches his desk.