The House of Representatives last week passed a defense spending bill that included a provision allowing cannabis companies to access traditional banking services, a victory for banks and credit unions working in the industry. .
On July 14, the House passed the FY23 National Defense Authorization Act, an appropriations bill that sets the budget for the U.S. defense industry and funds public safety, on a vote of 329-101.
Among the many amendments incorporated into the bill is the Safe and Fair Banking (SAFE) Act, a bipartisan measure that would protect financial institutions from government sanctions if they offer banking services to licensed businesses in the banking industry. cannabis.
“The purpose of this subtitle is to increase public safety by ensuring access to financial services for legitimate cannabis-related businesses and service providers and by reducing the amount of money in these businesses”, the text of the ‘amendment States.
So far for many cannabis companies cash was their only means of transaction as financial institutions, compliant with state legislation that still criminalizes cannabis-related activity, have shunned them despite the drug being legalized in many states. Rep. Ed Perlmutter, D-Colo., the original sponsor of the SAFE Banking Act, said last month that forcing cannabis companies to trade only in cash by excluding employees and business owners from the banking system creates a “public safety risk”. He warned that “as a result of Senate inaction, people continue to be killed, businesses continue to be robbed.”
This is the seventh time the bill has passed the House and reached the Senate, where it has stalled the last six times because Senate Democrats, led by Majority Leader Chuck Schumer of New York, wanted to replace it with a comprehensive bill to legalize the cannabis industry with broader policies to address criminal justice and the social equity. Failure to support this broader effort could mean that the narrower SAFE Banking Act has a better chance of passing as part of the Defense Spending Bill.
“This is a new opportunity for the Senate to push forward common sense cannabis reforms, starting with access to the banking system. I call on them to take action for the safety of our communities and the success of corporate-owned businesses. veterans and minorities across the country,” Perlmutter said in a press release last week, referring to veterans and racial minorities in the cannabis business.
Additionally, an amendment by Rep. Maxine Waters, D-California, passed into the NDAA that would allow credit unions to increase their ability to borrow funds from the Central Liquidity Facility, up to 16 times capital. poured from 12 times. before the COVID-19 pandemic, through 2023. The CLF is a program that allows credit unions to access liquidity if they run out of cash, which comes at a time of rising interest rates. interest and uncertain economic pressures.
Credit union industry executives applauded the actions. “Allowing financial institutions to serve legal cannabis-based businesses enhances public safety, and the added flexibility of CLF will help credit unions access liquidity when needed,” said Jim Nussle, President and CEO. of the Credit Union National Association. statement on CUNA website.