On Thursday, a reform that would protect financing institutions that service federally-legal cannabis businesses from federal regulators’ penalties will be reintroduced in the House. Multiple sources confirmed this.
Representative Ed Perlmutter and a bipartisan panel of co-sponsors will re-launch the proposal. The bill was titled the SAFE (Secure and Fair Enforcement) Banking Act. The House approved the initiative along bipartisan lines in the previous Congress; however, it failed to ascend past the Senate that was under Republican control.
Since Democrats now have more power over the House, white House and Senate, industry participants expect the legislation to become law before the end of 2021. A Senate companion version of the reform will possibly be submitted next week.
The SAFE Banking measure would ensure that banks would accept marijuana business customers without facing state penalties. Fear of federal or state sanctions has kept countless credit unions and banks from opening doors to the MJ industry, making cannabis businesses run on a cash schedule, making them crime targets, and creating issues for banking regulators.
With more states legalizing medical and recreational cannabis, financial institutions have depended on the 2014 guidance from the FinCEN (Financial Crimes Enforcement Network) that instructs them to file suspicious practice reports if they choose to fund marijuana businesses. Since 2014, various depositories targeting cannabis clients have increased gradually.
The president of IRS (internal revenue service) told Congress in February that the state agency prefers the federally legal marijuana firms to pay their taxes electronically since the existing cash system under prohibition is arduous and carries risks to employees.
Apart from being passed as an independent legislation in 2019, the SAFE Banking Act was also House-approved after legislative leaders incorporated its language to the two versions of the COVID-19 relief proposal in 2020. However, they refused to include it in their recent version ascended into law by President Biden in February.