Reintroduced: 'SAFE Banking Act' and Federal Maturities Bill

Capitol Hill

On Thursday, Rep. Ed Perlmutter (D-CO) reintroduced his landmark legislation to reform federal cannabis laws. The bipartisan Secure and Fair Enforcement (SAFE) Banking Act of 2021 (supported by the California and Nevada Credit Union Leagues and co-sponsored by more than 100 members of Congress) would allow marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system.

Forty-seven states, four U.S. territories, and the District of Columbia (representing 97.7 percent of the U.S. population) have legalized some form of recreational or medical marijuana, including CBD, according to a news release from Perlmutter's office. Yet current law restricts legitimate licensed marijuana businesses from accessing banking services and products, such as depository and checking accounts, resulting in businesses operating in all cash.

In the 116th Congress, 206 members cosponsored the SAFE Banking Act and it passed the U.S. House in a broad bipartisan vote of 321 to 103, with 91 republicans and one independent voting in support. The bill also passed as part of the Heroes Act, an earlier COVID-19 relief package which was approved by the House on two separate occasions. In February 2019, the SAFE Banking Act prompted the first-ever congressional hearing on the issue of cannabis banking.

The SAFE Banking Act provides protections from money laundering laws for any proceeds derived from these state-legal marijuana businesses. "This will get cash off the streets and into the financial system, which is built to root out fraud and illicit activity," the statement said.

The bill also includes protections for hemp and hemp-derived CBD related businesses, which still struggle in accessing financial services despite the legalization of hemp in the 2018 Farm Bill. The current version of the bill has been updated slightly to include minor technical changes to the safe harbor, strengthened hemp provisions, and other technical updates.

The U.S. cannabis industry continues to grow at a rapid rate, with the current value estimated at $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. Over the 2018 - 2028 period, job growth in this market is projected to climb 250 percent, the fastest rate for any sector in the U.S.

"Bringing in this cash will make the industry safer and give banks and credit unions more capital to lend during the economic recovery as a result of the COVID-19 pandemic," Perlmutter added.

The SAFE Banking Act of 2021 is supported by the American Bankers Association (ABA); American Council of Independent Laboratories (ACIL); American Council of Life Insurers (ACLI); American Financial Services Association (AFSA); American Land Title Association (ALTA); American Property Casualty Insurance Association (APCIA); Arizona Dispensaries Association (ADA); Cannabis Business Association of Illinois (CBAI); California and Nevada Credit Union Leagues (CNCUL); California Cannabis Industry Association (CCIA); Colorado Bankers Association (CBA); Colorado Municipal League (CML); Credit Union National Association (CUNA); Council of Insurance Agents & Brokers (CIAB); Electronic Transactions Association (ETA); Independent Community Bankers of America (ICBA); Independent Insurance Agents & Brokers of America (IIABA); Law Enforcement Action Partnership (LEAP); Mountain West Credit Union Association (MWCUA); National Association of Mutual Insurance Companies (NAMIC); National Association of Professional Insurance Agents (PIA); National Association of Realtors (NAR); National Cannabis Roundtable (NCR); National Cannabis Industry Association (NCIA); National Organization for the Reform of Marijuana Laws (NORML); Minority Cannabis Business Association (MCBA); Policy Center for Public Health & Safety; Reinsurance Association of America (RAA); Rural County Representatives of California (RCRC); The Real Estate Roundtable; United Food and Commercial Workers (UFCW); US Cannabis Council (USCC); and the Wholesale & Specialty Insurance Association (WSIA).

Federal Maturities Bill Reintroduced
Senators Catherine Cortez Masto (D-NV) and Tim Scott (R-SC) have reintroduced bipartisan legislation to allow federally chartered credit unions to increase the maturity terms on non-first mortgage related products. The bill is currently awaiting a number as it moves through the Senate's introduction process.
The legislation is necessary as federally chartered credit unions remain limited to a 15-year maturity cap on non-owner-occupied residential loans, agricultural loans, and some housing and student loans. In California and Nevada, the state charter does not provide a restriction, which is another reason this federal parity bill is gravely needed.
This legislation arrives as credit unions have spent the past three weeks meeting with congressional lawmakers regarding our industry’s priorities for the legislative session. Updating and modernizing the federal charter remains a top priority for the League and the Credit Union National Association (CUNA). This will not be the last charter enhancement to be introduced. Several measures are pending in development.

Pin It