SAFE Has Been Re-introduced with Bipartisan Support

Foley Hoag LLP - Cannabis and the Law
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Foley Hoag LLP - Cannabis and the Law

The SAFE Banking Act is back. First introduced in 2019, the Secure and Fair Enforcement Act (“SAFE”) passed in the House but died in the Republican-controlled Senate. Now, the bill has been reintroduced in both the House and the Senate with bipartisan support, as well as support from the American Bankers Association. Despite broad support, it remains unclear – and probably unlikely – the legislation could move as a standalone bill without accompanying removal of cannabis from the schedule of controlled substances and restorative justice provisions to expunge or pardon past cannabis offenses.

If passed, SAFE would allow financial institutions to provide services to cannabis clients without fear of federal penalties. SAFE establishes a safe harbor for depository institutions providing financial services to cannabis businesses by prohibiting federal banking regulators from:

  • Terminating or limiting deposit insurance for servicing cannabis clients;
  • Prohibiting, penalizing, or discouraging a depository institution from providing financial services to cannabis clients;
  • Recommending, incentivizing, or encouraging a depository institution to not offer financial services to cannabis clients;
  • Taking adverse or corrective supervisory action on loans made to cannabis clients; and
  • Prohibiting or penalizing a depository institution for providing financial services to cannabis clients.

SAFE also directs the Secretary of the Treasury to ensure the guidance issued by the Financial Crimes Enforcement Network (FinCEN) is consistent with the purpose and intent of the SAFE Banking Act and does not obstruct financial institutions from providing financial services to cannabis clients.

The bill as reintroduced in the House can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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