Prior to the US House of Representatives voting to pass a marijuana banking bill for the fourth time, Congressional leaders were inundated with letters from state governors, attorney generals and treasurers as well as banking associations urging lawmakers to approve the measure.
Twenty state governors plus the governor of the US Virgin Islands expressed their support for the Secure and Fair Enforcement (SAFE) Banking Act’s passage so banks and credit unions can offer financial services to state-legal marijuana businesses without fear of federal reprisals. In the letter, which was spearheaded by Colorado Gov. Jared Polis, the governors draw attention to the dangers of marijuana businesses primarily operating in cash, as well as the burden it places on local government and state officials.
“Because few banks and credit unions provide these services, state-licensed cannabis businesses predominantly operate on a cash basis,” the governors’ letter reads. “Without banking services, state-licensed cannabis businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards.”
“Cash only businesses pose a significant public safety risk to customers and employees,” it continues. “The cash-only environment also burdens state and local government agencies that must collect tax and fee payments in person and in cash, which creates additional public expenses and employee safety risks.”
As well as Polis, the letter was signed by the governors of California, Connecticut, Illinois, Louisiana, Maine, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Utah, U.S. Virgin Islands, Virginia, Washington, West Virginia and Wisconsin.
In a separate move, bankers associations representing all 50 states plus Puerto Rico also sent Congressional leaders a letter in support of the SAFE Banking Act, which they described as “an important step to address the conflict between federal and state laws and how banks safely work with legal cannabis and cannabis related businesses.”
The American Bankers Association states in its letter that while it doesn’t have a position on the question of marijuana legalization, it wants to be able to service the needs of those living in states that voted for legal cannabis sales.
“Despite this ever-growing voter preference, current federal law continues to prevent banks from safely banking these businesses without fear of federal sanctions,” the letter reads. “As a result, this segment of our local economies is forced to operate on an all-cash basis, which creates serious public safety, revenue administration, and legal compliance concerns in the communities we serve.”
“The SAFE Banking Act is a banking-specific bipartisan solution that would address the reality of the current marketplace and allow banks to serve cannabis-related businesses in states where the activity is legal,” the letter concludes.
The week prior, the National Association of State Treasurers submitted its own letter to congressional leaders calling for the SAFE Banking Act’s passage and expressing its concerns regarding “the ancillary effects posed by legitimate participants in the industry lacking reliable access to the federally regulated banking system.”
“The National Association of State Treasurers continues to support commonsense federal laws and regulations to provide essential banking services to legitimate cannabis businesses, promote public safety and financial transparency, and facilitate tax and fee collection without compromising federal enforcement of anti-money laundering laws against criminal enterprises,” the letter reads. “To that extent, we fully support the key elements of the SAFE Banking Act that comport with our association’s policy as outlined in this letter and that is contained in our policy resolution.”
Adding their voice to calls for marijuana banking in states where cannabis is legal, three state attorney generals also wrote a letter to congressional leaders in support of the SAFE Banking Act.
While lawmakers in the US House of Representatives heeded the call to approve the SAFE Banking Act, it remains to be seen what the measure’s fate will be in the Senate. Under Mitch McConnell’s leadership, the SAFE Banking Act got no traction in the Senate but marijuana reform advocates are hopeful that the new Democratic majority will lead to some action. So far, however, the chairman of the Senate Banking Committee, Sen. Mike Crapo, has not called for a hearing of the bill while the new Senate Majority Leader, Sen. Chuck Schumer, appears more focused on drafting a comprehensive bill to end federal cannabis prohibition.