Just one day after New York credit union professionals were on Capitol Hill advocating for its passage, the U.S. House passed the Secure and Fair Enforcement Banking Act, commonly referred to as the SAFE Banking Act. The legislation was passed yesterday in bipartisan fashion, with every House member from New York voting in the affirmative.
The legislation, H.R. 1595, provides financial institutions with a safe harbor for providing services to marijuana-related businesses in states where the substance is legal.
The bill passed under suspension of rules by a vote of 321-103.
While the bill easily cleared the House, any legislation dealing with the loosening of marijuana rules faces uncertainty in the Republican-controlled Senate. Under federal law, marijuana remains an illegal Schedule 1 drug, which are among the most tightly controlled substances under the Controlled Substances Act.
However, two important developments have taken place that could signal a path to passage in the upper chamber: An amendment was added to the House bill that would bar federal regulators from terminating or limiting deposit insurance for institutions dealing with hemp-related businesses – a move widely seen as important to Senate Majority Leader Mitch McConnell, who is from Kentucky, one of the largest hemp-producing states in the nation.
Additionally, Senate banking committee Chairman Mike Crapo, R-Idaho, has signaled a desire to pursue his own cannabis banking bill. However, he has indicated there are still issues to be worked out. Crapo’s home state of Idaho is among the few states that has not legalized or decriminalized marijuana in any form, including for medical purposes. Still, the House bill contained an amendment that would restrict regulators from urging lenders to cut ties with consumers based on reputational risk, which is something Crapo favors.
The New York Credit Union Association strongly supports the SAFE Banking Act and will continue to advocate for its passage.
“If state law allows for it, credit unions should be able to accept deposits, extend credit and provide payment services to individuals or businesses engaged in marijuana-related commerce without fear of prosecution,” said Association President/CEO William J. Mellin. “Clearly, the SAFE Banking Act has strong, bipartisan support from our lawmakers here in New York. I’d like to thank each of the 27 House members from New York who voted in favor of this important legislation.”