A marijuana banking bill gains momentum after a Congressional Budget Office report estimates millions in federal savings.
A marijuana banking bill being considered by Congress could save the federal government money. A report released recently by the Congressional Budget Office (CBO) estimates a savings of $4 million from 2019-2029 if the Secure and Fair Enforcement Banking Act is passed and enacted by the end of fiscal year 2019 (Sept. 30.) The report released in May is anticipated to propel the SAFE Banking Act forward and help the bill to gain support from legislators on the fence about marijuana banking reform.
The SAFE Banking Act, or H.R. 1595, would allow cannabis-related businesses to access banking institutions in the 47 states where some form of marijuana is legal and where cannabis businesses have a regulatory system in place. A main component of the bill is the prevention of federal entities from acting against banks or credit unions that serve cannabis-related businesses. The act would also direct federal agencies to provide guidance to financial institutions servicing cannabis-related businesses.
The CBO report estimates that starting in 2022 insured deposits at banks would increase by about $1.2 billion and at credit unions by about $200 million. By 2029, those amounts are expected to rise to $2.1 billion for banks and to $350 million for credit unions.
The American Bankers Association is one of many financial organizations backing the SAFE Banking Act. According to the ABA’s position found on their website, “ABA believes the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use.”
Want 4 million more reasons why members of Congress should support the #SAFEBankingAct, which would allow cannabis businesses to access the banking system in the 33 states where it’s legal? @USCBO says the legislation will save taxpayers $4M over 10 years.
— American Bankers Association (@ABABankers) May 24, 2019
The full CBO report can be found here.
SAFE Banking Act Gains Momentum
Introduced by Colorado Congressman Ed Perlmutter, the SAFE Banking Act was discussed at the first-ever congressional hearing on cannabis banking on Feb. 13. The bill now has 200 cosponsors in the House and on June 5 a long list of state governors sent a letter to Congress in support of the bill.
Perlmutter released a statement after the bill easily passed the House Financial Services Committee.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs. These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions. Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer,” stated Perlmutter.
“While Congress has stuck its head in the sand for many years, this Committee has shown leadership on this issue and I want to thank my cosponsors and members of the Committee for their support.”
An amendment was added to the bill before it passed the House committee to require a study on the barriers to market entry and financial services for potential or existing minority- owned or women-owned cannabis-related businesses. Endorsements for the bill have also come from the National Association of Attorney Generals and National Association of State Treasurers. All 50 state banking associations have also urged Congress to pass the marijuana financial services bill.
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