Rep. Porter-backed Bill to Protect Financial Institutions Serving Marijuana Businesses Clears Key Committee Hurdle
WASHINGTON – The House Financial Services Committee, on which Congresswoman Katie Porter (CA-45) serves, this week approved legislation backed by Porter which would protect financial institutions serving state-legal marijuana businesses, including those in California. The Secure and Fair Enforcement (SAFE) Banking Act was passed by a bipartisan majority of 45-15 and included an amendment by Porter that clarifies that new banks and credit unions are also afforded all the protections offered by the legislation.
“The SAFE Banking Act enables women to more fully participate in the cannabis market, as many don’t feel safe under the current system transporting the cash necessary to run state-legal cannabis businesses,” Congresswoman Porter said. “My amendment would further ensure that entrepreneurs and new banks and credit unions can access the protections guaranteed by the SAFE Banking Act. This legislation with my amendment levels the playing field so everyone can access the benefits of this new market.”
The SAFE Banking Act supports cannabis businesses that are legal in California. With the federal government classifying marijuana as an illegal substance, banks providing services to legitimate cannabis businesses could find themselves subject to criminal and civil liability under federal law. Many cannabis businesses have no access to the banking industry and as a result are unable to accept credit cards, deposit their profits, or write checks to pay employees or taxes. This lack of security makes it more difficult for women in particular to participate in this industry.
The Porter-backed amendment has the support of a number of industry leaders, including the California Cannabis Industry Association, the National Cannabis Industry Association, the Safe and Responsible Banking Alliance, and the Credit Union National Association.
“The California Cannabis Industry Association commends Ms. Porter's amendment to the SAFE Banking Act for further clarifying the intended protections of existing and emerging depository banking institutions conducting business with the cannabis industry,” said Lindsay Robinson, Executive Director of the California Cannabis Industry Association. “The ability to use U.S. financial institutions for banking is essential to ensure the safety of the cannabis industry and cannabis consumers. The lack of access to banking creates an untenable situation where the safety of consumers, employees, and companies is at risk.”
“The addition of language to the SAFE Banking Act to ensure that new banks or credit unions will get the same protections as existing depository institutions will remove an important roadblock for new market entrants that want to work with the legal cannabis industry,” said Morgan Fox, spokesperson for the National Cannabis Industry Association. "This assurance further clarifies the protections offered by the bill and should help it gain even more support.”
“SARBA applauds the inclusion of the Porter Amendment to protect de novo banks in the SAFE Banking Act,” said Becky Dansky, Executive Director of the Safe and Responsible Banking Alliance. “The cannabis industry is an emerging market, and de novo banks are a critical to the success of the industry -- they’re more entrepreneurial and are likely to be leaders in providing loans and financial products to legitimate marijuana businesses. Congresswoman Porter’s amendment solves a major problem for new financial market entrants.”
Now that the bill has advanced out of committee, it awaits a vote in the full House.