SAFE Banking Act Shows Benefits of Financial Sector Cooperation

Last week’s historic House vote to advance the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595) was an example of what can happen when the financial services sector works together, CUNA Chief Advocacy Officer Ryan Donovan wrote in The Hill Tuesday.

Donovan says the story of how the bill advanced represents some of the best practices in financial services lawmaking, starting with the tenacity of the bill’s sponsors, Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).

“Their efforts were supported by a unified financial services sectors led by credit unions, banks and their associations working together to help Congress and their industries understand that the cannabis banking legislation wasn’t about making cannabis legal, but rather about making sure that legal cannabis business can bank safely,” Donovan writes. “Credit unions and banks working together on Capitol Hill might sound novel, and it certainly makes lawmakers take notice, but it’s not new. We’ve worked together to enact regulatory relief legislation; we stood side by side at the Consumer Financial Protection Bureau; we’ve even been on the same side of data breach litigation.

“And when we’ve worked together, we’ve almost always achieved a positive outcome for the institutions we represent and the consumers and small businesses they serve,” he adds.

Donovan notes that the success achieved with last week’s vote shows that credit unions and banks working together can tackle “something equally insurmountable, not just ‘run of the mill’ trade issues.”

“Neither banks nor credit unions are strangers to the reputational and financial costs associated hacked accounts and identity fraud,” he writes. “Can our combined efforts pave the way for a long-past-due national data security and privacy package?”

In the weeks leading up to the vote, CUNA President/CEO Jim Nussle and American Bankers Association President/CEO Rob Nichols cosigned an appeal in FOX Business to Congress to pass the SAFE Banking Act, and the two appeared at a rally celebrating last week’s House passage of the bill.

CUNA and the Leagues will continue to work with banking trades to shepherd the legislation through the Senate.

The issue was front and center during the NJCUL’s recent in-district meetings with members of the New Jersey delegation.

The House bill had 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) currently has 33 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.  

Eighteen state and two territorial governors added their names to a letter urging Congress to pass the legislation. 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.

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.