In a recent development that has been labelled a breakthrough for the regulated marijuana sector, the Secure and Fair Enforcement Regulation (SAFER) Banking Act received the Senate legislative panel’s approval last week, following a series of changes aimed at silencing critics, notably Republican lawmakers. First introduced on September 21, this groundbreaking legislation made its way through the Senate Committee on Banking, Housing and Urban Affairs with amendments.

This newly launched bipartisan bill is the result of the collaborative effort of Sen. Steve Daines, a Republican from Montana, and Oregon Democratic Sen. Jeff Merkley. The aim of the legislation is to ease the path to standard banking services for marijuana enterprises operating legally under state or tribal law. Presently, federal law closely controls these services, excluding many businesses—predominantly small, independent operators—from access to bank accounts, credit card processing, and other crucial financial services. Consequently, these businesses are forced to run on cash transactions, which exposes them, their clients and staff to the risk of criminal activity. 

The creation of SAFER Banking Act emerged after several months of negotiation among senators concerning diverse aspects of the pre-existing SAFE Banking Act. It proposes that federal regulators formulate standard guidance and examination procedures, inclusive of legacy cannabis-related deposits and provide updates on businesses and service providers pertaining to the hemp industry. Under the new Act, regulators are barred from insisting on closing a bank account unless a valid reason demands it, also protecting employees of state-legal marijuana enterprises seeking to secure residential mortgages funded by federal programs.

A mere week following its introduction, the SAFER Banking Act underwent a markup hearing by the Senate Banking Committee on September 27. Post the approval of a fresh amendment to the bill from committee Chairman Sherrod Brown, an Ohio Democrat, the legislation managed to pull in a 14-9 vote in its favour, moving it up for consideration by the full chamber on the Senate floor.

The new amendment incorporates procedural changes and revisions stemming from requests from members across both parties. It integrates significant alterations in federal guidance for banks serving the marijuana industry, and reframed safeguarding measures for banks against possible discretionary enforcement from federal banking regulators.

With the new bill, the Treasury secretary is given a year to release updated advice for banks servicing the marijuana industry. This is a major extension from the previous version which allowed only 180 days for a similar update. The guidelines mandate banks and depository institutions serving marijuana businesses to submit Suspicious Activity Reports (SARs) for their cannabis clients. 

The amended legislation mandates the director of the Financial Crimes Enforcement Network (FinCEN) to testify before Congress about money laundering containment within a year of the Act’s implementation. It widens the protections for banks engaging with legal marijuana activities to include federal home mortgage banks.

Simultaneously, some changes were not welcomed by everyone. The bill removed a section favoured by equality advocates that obligated financial institutions to build policies on facilitating access to banking services for rural, tribal and low or middle-income communities.

Current updates suggest that Senate Majority Leader, New York Democrat Chuck Schumer, aims to put forth the SAFER Banking Act for the full Senate’s vote “as rapidly as imaginable.” He also promises to append fresh penal code-related amendments allowing for the expungement of old marijuana offences and protecting the gun rights of marijuana users.

However, the road ahead for this bill doesn’t seem entirely smooth. Its passage may hit a roadblock within the House of Representatives, where the SAFE Banking Act has already greenlighted multiple times, either as a sole bill or coupled with other legislation. Rep. Blaine Luetkemeyer, a Missouri Republican and a member of the House Financial Services Committee, expressed concerns that the reformed Section 10 perpetuates banking regulators’ “wide discretion” that may result in bias against contentious businesses.

Luetkemeyer stated, “In its current state, the SAFER Banking Act will not pass through the House.”

As a disclaimer, the opinions expressed in this article don’t reflect those of High Thailand.

Avatar photo


Trunkee is our mascot and the mysterious master mind behind "The Daily Trunk", our news section of HighThailand for all things cannabis in Thailand.