R Street Applauds Committee Passage of Bill to Legalize Cannabis Banking
From Puff Puff Post:
The R Street Institute urges the full U.S. House to take up H.R. 1595, legislation ensuring that banks and credit unions do not face federal sanctions for providing financial services to cannabis-related businesses that are legal under state law. The measure, also known as the Secure And Fair Enforcement (SAFE) Banking Act of 2019, was passed today in a bipartisan vote by the House Financial Services Committee.
Sponsored by Rep. Ed Perlmutter, D-Colo., the SAFE Banking Act would provide regulatory safe harbor for lenders who service legitimate cannabis-related businesses but who might otherwise, knowingly or unknowingly, risk violating the federal Controlled Substance Act, the USA PATRIOT Act, the Bank Secrecy Act, RICO and other federal statutes, according to R.J. Lehmann, R Street’s director of finance, insurance and trade policy.
“While some lenders have dipped their toes into the cannabis market, most did so initially under the legal safe harbor offered by the 2013 Cole Memorandum, which the U.S. Justice Department formally rescinded in January 2018,” Lehmann said. “Because of this uncertainty, lenders who serve the market need to be prepared to unwind their loans at any moment. And without the kind of permanent safe harbor the SAFE Banking Act offers, many other lenders – including those with the kinds of robust compliance processes needed to service this sector effectively – remain on the sidelines.”
“Extending credit to an indirect affiliate of a legitimate cannabis business or even counting the income of an employee as collateral for a home or auto loan could potentially trigger sanctions,” Lehmann said. “The SAFE Banking ACT would provide predictability and transparency to the lending market in an era of shifting and sometimes contradictory legal norms around cannabis.”