The long-awaited SAFE Banking Act is set for a House vote today. Cannabis Wire has reported that some of the largest banks have listed the legislation in their lobbying disclosures, but the larger question remains: If the bill is passed, will mainstream banks like JPMorgan and Wells Fargo work with the cannabis industry?
The Secure and Fair Enforcement (SAFE) Banking Act has garnered bipartisan support since its introduction in March. The bill is expected to sail through the House but possibly face a tougher road to passage in the Republican-led Senate. The SAFE Banking Act aims to address the cannabis industry’s obstacles to banking by providing legal protection to financial institutions who choose to provide services to state legalized cannabis businesses.
Cannabis Wire has been following the legislation closely, and recently found which mainstream banking institutions are lobbying around the bill. The American Bankers Association has been one of the bill’s most vocal supporters, and the expected cannabis giants (PharmaCann, Curaleaf Inc., etc.) are of course on the list.
Banking giants like Wells Fargo, HSBC, Citigroup, and M&T have joined the debate, according to lobbying disclosures, though most have been reluctant to take a public stance on cannabis businesses and legislation. In the meantime, the latest Marijuana Banking Update released in June of this year by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) shows a noticeable uptick in depository institutions “actively providing banking services to marijuana related businesses.”
By the end of June, FinCEN reported that 553 banks and 162 credit unions were banking with cannabis-related businesses, a (roughly) 66 percent increase in banks willing to serve cannabis businesses since the June 2018 FinCEN Marijuana Banking Update.
A major question looms as lawmakers take up the SAFE Banking Act. If the bill passes, will big banks take the plunge and work with cannabis businesses? Or will they wait for full federal legalization? Here’s what Cannabis Wire has learned so far.
Spokespeople at Citigroup Washington, Inc. and M&T Bank Corporation, both of which listed the SAFE Banking Act on their lobbying disclosures, referred Cannabis Wire to the American Bankers Association (ABA) regarding the legislation. ABA has been one of the most vocal supporters of the SAFE Banking Act, and though the association does not take a position on the legalization of cannabis, it has expressed public support for the legislation since its introduction to the House earlier this year. Last week, ABA also wrote a letter to the House, urging lawmakers to pass the bill and this Tuesday, ABA president and CEO Rob Nichols sent another letter to Speaker Nancy Pelosi and Minority Leader Kevin McCarthy urging House passage of the SAFE Banking Act.
“We believe such explicit, consistent direction from federal financial regulators will provide needed clarity for banks and help them to better evaluate the risks and supervisory expectations for cannabis-related customers,” Nichols wrote. “The SAFE Banking Act, as amended, is an important measure that helps clarify many issues for the banking industry, regulators, businesses and consumers.”
The last line of the letter, bolded for emphasis, reads: “ABA urges members of the House to support H.R. 1595.”
Jeff Sigmund Senior Vice President of Public Relations at ABA, told Cannabis Wire that Nichols’ letter signifies the organization’s “latest going into the vote.”
Jennifer G. Dunn, Senior Vice President of Public Affairs at Wells Fargo, said that the SAFE Act “isn’t necessarily a priority,” but that the legislation was included in Wells Fargo lobbying disclosures because of their involvement in “trade associations.” Though Dunn said Wells Fargo will not speculate on any future business decisions, she did tell Cannabis Wire in an email that the “confusion created by conflicts between federal and state laws regarding marijuana-related issues is an industry-wide problem for financial services-institutions and their customers.”
Cobank and Key Bank listed the SAFE Banking Act in their lobbying reports, but declined to comment for this story. Paypal and HSBC North America also disclosed the Act in their lobbying disclosures, but did not respond to multiple requests for comment. Banking giants Bank of America, Capital One, and Morgan Stanley did not list the SAFE Banking Act on their lobbying disclosures, and declined or could not be reached for comment.
