The U.S. House of Representatives passed an amendment to the National Defense Authorization Act (NDAA) that would protect banks that do business with cannabis companies in legal states from the penalties of federal regulators.
The Secure and Fair Enforcement (SAFE) Banking Act was introduced by Rep. Ed Perlmutter (D-Colorado) in every Congress for the past eight years, passing five times, Rep. Ed Perlmutter tweeted.
#SAFEBanking will strengthen the security of our financial system & keep bad actors like cartels out.
Most importantly, it will reduce the risk of violent crime in our communities.
It’s passed the House 5 times. We cannot wait any longer to address this public safety threat. https://t.co/inwnn6ouR1
— Rep. Ed Perlmutter (@RepPerlmutter) September 22, 2021
Calling the measure a matter of public safety and national security, Perlmutter said before the House vote that the SAFE Banking Act will reduce violent crime and keep “foreign cartels out of the cannabis industry,” according to multiple media reports.
“By dealing in all cash, these businesses and their employees become targets for robberies, assaults, burglaries and more,” Perlmutter said.
The recreational use of cannabis is legalized in 18 states, the District of Columbia, the Northern Mariana Islands and Guam. Another 13 states and the U.S. Virgin Islands have decriminalized its use. Thirty-six states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have approved marijuana for medical use, according to data from DISA.
Despite stateside legalization, cannabis remains federally classified as a Schedule 1 drug, which has stopped many financial institutions (FIs) from working with businesses in the space.
Some Senate Democrats have expressed that the SAFE Banking Act is not the right direction for reform, instead pointing to a more comprehensive initiative like the Cannabis Administration and Opportunity Act (CAOA). If passed, the necessity for the SAFE Banking Act would be questionable. Senate Majority Leader Chuck Schumer (D-New York), Sen. Cory Booker (D-New Jersey) and Sen. Ron Wyden (D-Oregon) introduced CAOA in July.
According to Schumer, the SAFE Banking Act concerns just one aspect of the many issues relating to cannabis, when a more all-inclusive approach is needed.
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Booker said that although he supports the SAFE Banking Act, he sees it as just a “necessary sweetener” to prompt action on the larger issue of equitable justice.
“I will lay myself down to do everything I can to stop an easy banking bill that’s going to allow all these corporations to make a lot more money off of this, as opposed to focusing on the restorative justice aspects,” Booker said, per reports.