House passes SAFE Banking Act, ensuring that banks can work with legitimate cannabis-related businesses

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H.R. 1996, known as the Secure and Fair Enforcement (SAFE) Banking Act of 2021, was passed by the House of Representatives, and has moved onto the Senate and referred to the Committee on Banking, Housing, and Urban Affairs. The act was created to protect financial institutions providing financial services to cannabis-related legitimate businesses and service providers. If passed into law, the SAFE Banking Act will prevent federal banking regulators from:

• Terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides or has provided financial services to a cannabis-related legitimate business.
• Prohibit, penalize, or otherwise discourage a depository institution from providing financial services to a cannabis-related legitimate business.
• Recommend, incentivize, or encourage a depository institution to not offer financial services to cannabis-related legitimate businesses.
• Take any adverse action or corrective supervisory action on a loan made to a cannabis-related legitimate business or service provider, or employee, owner, or operator of such as business

The act also protects financial institutions and insurers from liability solely for providing financial services or investing any income from financial services to cannabis-related legitimate businesses or service providers. The bill has support from the banking sector, with the American Bankers Association (ABA) advocating for the bill’s passage, as well as the consumer healthcare industry. The Consumer Healthcare Products Association (CHPA, Washington, D.C.) released the following statement about the bill’s passage:

“CHPA commends the House of Representatives for its passage of H.R. 1996, the SAFE Banking Act, introduced by Representative Ed Perlmutter (D-CO). The legislation would ensure that financial institutions can work with hemp and cannabis businesses without facing federal penalties.

“This bill comes at a crucial moment. As consumer demand for cannabidiol (CBD) products grows, products of questionable quality permeate the market. While House passage of H.R. 1996 is a positive step, House consideration of H.R. 841, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021, introduced by Reps. Kurt Schrader (D-OR) and Morgan Griffith (R-VA), is critical to protecting consumers and providing long-term certainty in the hemp-derived CBD market. 

“We urge the Senate to quickly pass H.R. 1996, and take swift action on H.R. 841 following its passage in the House.”