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SAFE Banking Added to Defense Bill, Hopes to Finally Survive Senate

safe banking defense bill hopes survive senate

Once again, the US House of Representatives has voted to include the SAFE Banking Act in the fiscal 2023 defense budget.

Although the vote comes as no surprise, anti-prohibitionists are waiting with bated breath as they prepare for the Senate response, which has previously lacked something to be desired.

SAFE Banking

The SAFE Banking Act aims to protect financial institutions that wish to take on clients within the cannabis industry.

Currently, financial institutions across the US are apprehensive about working with licensed cannabis businesses due to their taboo nature and out of fear that they will be legally reprimanded.

Only one out of every 30 banks or credit unions in the US accepts cannabis businesses as clients. In order to cover the additional expenses and risks they carry as a result of doing business with cannabis companies, those who do so frequently impose steep monthly account and transaction fees.

While there is no legal requirement prohibiting banks from working with cannabis businesses, they are expected to report any questionable or unlawful activity. If a bank files its transactions improperly or is accused of not fully adhering to the reporting guidance by a future bank regulator, it may be susceptible to significant fines. The reporting can be comprehensive and frequently covers each and every activity a consumer takes because it is based on the assumption that illegal activity is occurring and the money trail must be followed.

This is expensive for banks and cannabis companies, both of whom will pass on the financial burden to the customer.

As the legal cannabis market continues to grow within states across the country, financial institutions are becoming increasingly interested in working with retailers and distributors but will only do so if it makes sense for them financially. That said, the current legislature is causing banks to remain reticent.

Stripped By The Senate

Although the SAFE Banking Act has been widely supported by congresspeople, it has continuously been stripped once it reaches the Senate. Impressively, the SAFE Banking Act has been passed a whopping seven times by the House. On the other hand, it’s been rejected each and every time in Senate hands.

According to Democratic Representative Ed Perlmutter, “it’s time to get this done – and [he] will pursue any and all legislative avenues to do so.”

Perlmutter has been one of the hundreds of representatives who have expressed open support of the legal cannabis market. Thanks to Perlmutter and representatives like him, cannabis banking reform now appears to be feasible.

The window to enact banking reform and other laws is closing for 2022 as we approach the end of the year – and an election. The GOP leadership has shown little interest in cannabis reform despite the fact that Republican voters support the issue, and with Republicans widely expected to regain control of one or both chambers of Congress next year, it is imperative that representatives in Washington hear from constituents and small business owners about the need to provide relief through banking and other measures.

The SAFE Banking Act is actually being supported by several Republicans because they see it as a banking issue rather than a cannabis issue. The American Bankers Association, a powerful trade organization that vigorously defends the interests of the banking industry and wields considerable influence in Washington, particularly among Republicans, has endorsed the SAFE Banking Act wholeheartedly as well. The monitoring of all cannabis industry transactions would be a key aspect of banking access, assisting in ensuring that businesses follow state regulations and refrain from money laundering or product diversion.

Currently, 180 House members and 42 Senate members support the SAFE Banking Act. This means that just 58 Senate Representatives are not yet on board with the reform.

In order for the legislation to be passed at the Senate level, a simple majority is required. In other words, a vote of 51 to 49.

Sadly, there is no assurance that cannabis banking access will become legislation this year, despite widespread support for banking reform among members of both parties and significant advancements in recent months. According to Forbes, this is mostly a result of Democratic infighting on how to effectively reform this Congress.

Democrats are largely divided when it comes to cannabis reform – while some are focusing narrowly on banking, others seek to fully legalize recreational marijuana throughout the nation, a move congress Republicans are almost unilaterally opposed to.


There’s no denying that the SAFE Banking Act is something that is desired by cannabis and financial institutions alike. What’s more, it has been and continues to be overwhelmingly supported by congresspeople, particularly at the House level.

Nevertheless, relentless Senate stubbornness has put the initiative at a standstill, and the Democrats’ inability to unite and actualize their policy promises is blocking any potential movement from occurring.

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