Banking and Finance Law Daily Wrap Up, BANKING OPERATIONS—Representative Perlmutter attaches SAFE Banking Act as amendment to ‘America COMPETES’ bill, (Feb 1, 2022)

By Nicole D. Prysby, J.D.

The SAFE Banking Act has passed in the House multiple times but has failed to become law so far.

Congressman Ed Perlmutter (D-Colo) has announced via Tweet that he filed the Secure and Fair Enforcement (SAFE) Banking Act of 2022 as an amendment to the “America COMPETES Act.” The SAFE Banking Act would allow marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system. It would prevent federal banking regulators from terminating or limiting an institution’s deposit insurance or otherwise penalizing the institution because it provides financial services to a cannabis-related legitimate business or service provider. The SAFE Banking Act, which would prevent federal banking regulators from taking action against banks that serve cannabis businesses operating legally under state law, has passed in the House multiple times, including April and September 2021.

Representative Perlmutter has introduced the SAFE Banking Act in the House multiple times. As previously reported, in April 2021, the House of Representatives passed the SAFE Banking Act of 2021 (H.R.1996). That legislation was authored by Rep. Perlmutter and sponsored by Reps. Nydia M. Velazquez (D-NY), Steve Stivers (R-Ohio), and Warren Davidson (R-Ohio) (see Banking and Finance Law Daily, April 20, 2021). Later in 2021, the House agreed by voice vote to an amendment Rep. Perlmutter offered inserting the SAFE Banking Act of 2021 into the National Defense Authorization Act (NDAA) (see Banking and Finance Law Daily, Sept. 24, 2021). Although the Act has passed in the House multiple times, it has yet to be enacted into law.

Rep. Perlmutter tweeted that he filed the SAFE Banking Act amendment because “cannabis-related businesses—big and small—are in desperate need of access to capital & the banking system in order to operate in an efficient, safe manner & compete in the growing global cannabis marketplace.” The SAFE Banking Act of 2022 would create a safe harbor for financial institutions, by preventing federal banking regulators from terminating or limiting an institution’s deposit insurance or otherwise penalizing the institution because it provides financial services to a cannabis-related legitimate business or service provider. The Act would also require the U.S. Government Accountability Office to monitor and report to Congress annually on whether there is equal access to credit and whether barriers to marketplace entry have been reduced for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.

Perlmutter attached the Safe Banking Act to the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (America COMPETES) Act of 2022 (H.R. 4521), which would create investments in research, innovation, and American manufacturing. For example, the America COMPETES Act would accelerate U.S. production of semiconductor chips, strengthen the supply chain, and make major investments in scientific research.

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