Members of the United States Senate Committee on Banking, Housing, and Urban Affairs voted today to advance legislation, the SAFER Banking Act, which allows financial institutions to more readily establish relationships with state-licensed cannabis businesses.
Although members of the House have passed an earlier version of the legislation — the SAFE Banking Act — on seven prior occasions, today’s vote marks the first time that Senate members have voted in favor of the measure.
NORML’s Political Director Morgan Fox praised the Committee vote. “This bipartisan legislation represents an improved version of the SAFE Banking Act. It allows state-licensed cannabis businesses to more easily access financial services, such as opening a simple bank account, and it provides entrepreneurs with greater access to lending and other services that are available to other legal businesses.”
According to newly released data from the US Department of Treasury, only about about 12 percent of all US banks and about five percent of all US credit unions currently provide banking services to marijuana-related businesses.
Added Fox, “Marijuana businesses’ lack of access to these necessary financial services creates serious threats to the safety of cannabis consumers and the employees that serve them, limits transparency and accountability for those operating in this legal industry, and severely hinders the ability of small businesses to effectively compete with the underground market and with larger well-funded companies.”
According to survey data compiled last year by Whitney Economics, over 70 percent of participating cannabis businesses say that the “lack of access to banking or investment capital” is their top challenge. By comparison, only 42 percent of respondents cited “state regulations” as the most significant burden facing the industry, and only 39 percent cited the “influence of the illicit market.”
Writing in a recent commentary for The Hill, NORML’s Deputy Director Paul Armentano opined, “No industry can operate safely, transparently or effectively without access to banks or other financial institutions and it is self-evident that the licensed operators in this industry (smaller and minority-owned businesses in particular), and those consumers that are served by it, will remain severely hampered without better access to credit and financing.”
A diverse group of commercial and advocacy organizations, including the National Conference of State Legislatures, the American Bar Association, the NAACP, and the American Bankers Association back the legislation. According to national polling data compiled by Morning Consult, 65 percent of respondents “support allowing cannabis-related businesses to have access to banking services in states where cannabis is legal.”
Additional information on The SAFER Banking Act is available from NORML.