November 29, 2022

Volume XII, Number 333


November 28, 2022

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Cannabis Banking in the US – the Latest on the SAFE Act

In September 2019, the U.S. House of Representatives passed the “Secure and Fair Enforcement (SAFE) Banking Act of 2019”, the first stand-alone cannabis legislation to be approved by the House of Representatives. Earlier this month, revised versions of the bill were introduced in the House and Senate “to reform federal cannabis laws and reduce the public safety risk in communities across the country.”

The core of the legislation is the same as the prior bill passed by the House. For instance, the proceeds of transactions with cannabis-related legitimate businesses (CLBs) and their service providers would no longer be considered proceeds from an unlawful transaction and thus, not money laundering, and would not be subject to forfeiture.  Moreover, the bill would prohibit “federal banking regulators” from, among other things:

  • Terminating or limiting deposit or share insurance, or taking any adverse action against a “depository institution,” solely because the institution provides, or has provided, “financial services” to CLBs or service providers of a CLB;

  • Prohibiting, penalizing, or discouraging a depository institution from providing financial services to a CLB or service provider;

  • Recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder because of the account holder’s connection to a CLB; or

  • Taking any adverse or corrective supervisory action on a loan made to a CLB or service provider (or their employees, owners, and operators), or to the owner or operator of real estate leased to a CLB or service provider.

While the prospects of the bill passing the House look favorable, its chances in the Senate are more daunting.  For more information on key modifications to this version of the SAFE Act and the likelihood of passage, see our client alert here .

Copyright 2022 K & L GatesNational Law Review, Volume XI, Number 96

About this Author

Brendan Chainey Attorney K&L Gates Law Firm

Brenden Chainey is an associate at the firm’s Washington, D.C. office. A member of the public policy and law practice group, he is a seasoned policy professional and experienced attorney with significant government relations, legislative, litigation, and labor/employment experience advising Congressional members, venture-backed companies, and executives of Fortune 500 companies.

During eight years on Capitol Hill, Brenden served in various capacities including as Legislative Director for Congressman Chaka Fattah (D-PA), a member of the...

Daniel Cohen, KL Gates Law Firm, Washington DC, Finance Law Attorney

Dan Nuñez Cohen is an associate in the firm's Washington, D.C. office. Dan advises and advocates for clients at the intersection of federal legislative and regulatory policy and compliance, focusing on financial services issues affecting depository institutions, trust companies, money services businesses including digital asset exchanges, wallet providers, and token issuers; and the cannabis industry. He has experience assisting with bank charters and money transmitter licenses; counseling clients on compliance with federal banking and trust laws; and advocating for...

Daniel Crowley, KL Gates Law Firm, Public Policy Attorney

Dan Crowley is a partner in the firm’s Washington, D.C. office. His practice is focused on public policy issues relating to financial services and capital markets.

Mr. Crowley represents category-leading financial services clients across a broad range of policy issues including accounting & financial reporting, broker-dealer & securities trading, commodities & futures, corporate governance, depository institutions, derivatives & securitization, hedge funds, insurance, investment management, mortgage banking & consumer finance, and retirement...

Scott J. Gelbman Government Affairs Analyst K&L Gates Washington, D.C.
Government Affairs Analyst

Scott J. Gelbman is a government affairs analyst at the firm’s Washington, D.C. office. He is a member of the Public Policy and Law practice group.

Barry Hartman, Litigation Attorney, Environmental Attorney, KL Gates Law Firm

Mr. Hartman represents companies and individuals in criminal and civil investigations, trials, and appeals primarily involving complex federal regulatory programs, with an emphasis on environmental matters, and advises clients on compliance with those programs. He also conducts internal investigations, counsels clients regarding corporate compliance programs, and represents clients in Congressional investigations regarding lobbying, ethics, and related issues. He has represented clients in industries including maritime, energy, pharmaceuticals, healthcare, recycling, chemicals,...