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SAFE Banking Act Not a Slam Dunk

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Senate Hearings for SAFE Banking Act Not Well Attended, But Act Still Seems Inevitable – LPC

The SAFE Banking Act would allow cannabis industry companies like this Portland processing company to do business with banks.The Senate Committee on Banking, Housing and Urban Affairs hosted a hearing on the SAFE Banking Act – but it wasn’t well attended by committee members. No Republican committee members showed up aside from Mike Crapo, the committee chair. Presidential hopeful Elizabeth Warren also skipped the meeting. Crapo cited conflicts with the members, but others speculated it underlined what a hot topic cannabis is.

“It really highlights the fear of Republicans to emphasize their prohibitionist policy positions,” Justin Strekal said. Strekal is the political director for the National Organization for the Reform of Marijuana Laws in the US.

The hearing, titled “Challenges for Cannabis and Banking: Outside Perspectives”, allowed cannabis industry advocates to voice support for the SAFE Banking Act. Specifically, they spoke about the challenges the cannabis industry faces getting basic banking services. Although recreational and/or medical cannabis is legal in 33 US states, it is still illegal federally. This creates a grey area for banks, who could be charged with money laundering and other federal offences. This was true in the hemp industry as well, until the US legalized hemp last December.

Bill Focuses on Banking, Not Cannabis Legalities – LPC

The Secure and Fair Enforcement (SAFE) Banking Act, would allow banks, credit unions and other financial institutions to work with the cannabis industry. The bill is a stripped-down version of the Strengthening the Tenth Amendment Entrusting States (STATES) Act (which Warren co-sponsored), with just the banking portion.

Some banks have taken the risk, but most won’t, the committee heard.

“The majority of financial institutions will not accept the legal, regulatory, or reputational risk associated with banking cannabis-related businesses,” Joanne Sherwood wrote in testimony. Sherwood, the CEO of Citywide Banks, advocated on behalf of the American Bankers Association. Passing of the SAFE Banking Act would allow banks to safely work with cannabis industry companies.

Republican Senator Cory Gardner said that the hearing and the SAFE Banking Act are an important wake-up call for the federal government. “The states are leading on this issue, and the federal government has failed to respond,” he said. “It has closed its eyes and plugged its ears and pretended the issue will go away. It won’t.”

This editorial content from the LPC News Editor is meant to provide analysis, insight, and perspective on current news articles. To read the source article this commentary is based upon, please click on the link below.

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