The Senate Banking Committee is scheduled to mark up a new version of the SAFE Banking Act, now known as the “Secure And Fair Enforcement Regulation Banking Act” or the SAFER Banking Act (SB 2860). The revised bill addresses concerns around potential bad actors, but also establishes guardrails in the case that federal regulators may want to put pressure on banks to not service certain customers, such as “marijuana-related businesses” or other high-risk industries.
Like previous versions of the SAFE Banking Act, the SAFER Banking Act creates a safe harbor for depository institutions that wish to provide financial services to state-sanctioned marijuana businesses or service providers (marijuana-related businesses). The SAFER Banking Act, however, makes clear that federal banking agencies have a duty to ensure that the depository institutions supervised by those agencies (1) are operating in a safe and sound manner, and (2) have processes and procedures in place to identify fraudulent or illegal activity, whether activity occurs at a depository institution or through vendors or customers with which a depository institution has a relationship. The act goes on to provide some guidelines for assessing risk, and encourages banks to “take a risk-based approach in assessing individual customer relationships rather than decline to provide banking services to categories of customers without regard to the risks presented by an individual customer or the ability of the depository institution to manage the risk.” SB 2860 § 10(a)(5).
In an attempt to balance concerns about government overreach in previous versions of the SAFE Banking Act, the SAFER Banking Act prohibits federal regulators from requesting that a bank terminate an account or group of accounts without valid reason, and specifies under which circumstances a bank must, or must not, give a problematic customer notice that their accounts will be terminated.
Social equity concerns are also addressed. Within two years of enactment, federal banking agencies, in consultation with state bank supervisors, the secretary of commerce, and the secretary of the Treasury, must promulgate rules or guidance that will specifically increase access to financial services in rural, Tribal, low-, and moderate-income communities.
Stakeholders have reason to be weary, having been through the exercise of a cannabis banking bill’s introduction and eventual failure seven times now. It is notable, however, that this is the first time the Senate is taking the lead on a version of a marijuana banking bill, and could be the first time this issue is brought to a vote in the full Senate. Unfortunately, it comes as the federal government faces as a potential shutdown due to lawmakers’ inability to agree on a spending bill. Such a shutdown would slow progress on many issues, including marijuana banking.
