Will The SAFE Act. Finally Pass-Through All Chambers OF Congress?
The SAFE Act is a bill that would allow financial institutions to take money from cannabis businesses. With the SAFE Act. it would protect banks from any legal issues with the federal government. This week the bill is going to be reintroduced to the House. A bunch of cosponsors along with Rep. Ed Perlmutter will be the ones to bring the bill to the house for the second time.
At one time the Secure and Fair Enforcement or the SAFE Banking Act passed in the House but was shot down in the once Republican ran Senate. With the White House having a new administration that is run by the Democrats marijuana legislation has a good chance of passing in 2021.
As mentioned above essentially the SAFE Act. would protect banks from any federal issues when working with cannabis businesses. The industry has had a great number of worries about these banking issues with concerns of being penalized. This has created a submissive position for cannabis businesses to only deal with cash which makes them a possible mark for a crime.
This alone makes it tough for financial institutions to work within the sector. With more states legalizing marijuana in some form, banks have leaned on the guidance from the Financial Crimes Enforcement Network. This would mean banks need to report suspicious activity if they chose to offer financial services to cannabis businesses. So in this time, a lot of financial institutes have been working with more cannabis clients.
The Power Of Banking In The Cannabis Industry
The person in charge of the IRS explained to Congress that they want legal cannabis businesses to pay taxes electronically. as the all-cash process creates more risk for employees. Steve Mnuchin who was once the Treasury Secretary back in 2019 stated that he would like Congress to pass a law that would allow banks to take cannabis money.
He also highlighted the fact that the IRS would need to develop rooms to hold cash. This room would be used to deposit taxes from cannabis-related businesses which is an issue its self. Also in 2019, the SAFE Act. was approved by the House when two pieces of coronavirus relief legislation were added to this standalone bill. However, they denied adding it to the most recent version that was recently signed into law by President Joe Biden. Even though having restored the majority in both the House and the Senate of the White House.
At the time this standalone bill was ready to be voted on in 2019 there was some friction from some people. Some advocates felt that Congress should have made proper cannabis reform more of a priority as well as social equity. This is in comparison to pushing a measure that favors the interest of the cannabis industry.
Thoughts On Cannabis Banking And The SAFE Act.
Yet legislators in Congress are working to introduce a bill to end federal cannabis prohibition. Currently, legislators are working with advocates to create a piece of cannabis legislation. This approach is geared towards how to take the best route for policy change. Senate Majority Leader Chuck Schumer has mentioned that legislators will need to push for widespread cannabis reform amongst financial reform.
“Congress should not enact banking reform alone and think the job is done,” he tweeted in 2019. “We need decriminalization at the federal level, criminal justice reform, and investment in opportunity for minority & women-owned small businesses.”
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Will This Cannabis Banking Bill Pass In Congress?
Right now it’s uncertain if this outlook is a sign that he is not in favor of the SAFE Act. If Schumer gives allows it to the floor it may have a bigger landscape for cannabis reform. In addition to this House Judiciary Chairman Jerrold Nadler brung up, he would like to reintroduce the MORE Act. This bill would federally reschedule cannabis along with other social equity plans for those in the cannabis industry.
As of now, the American Bankers Association has stated it’s necessary to pass marijuana banking laws. While the group does not have a simple stance for more comprehensive reform. In a message to Perlmutter and other sponsors of the reintroduced SAFE Banking Act that the cannabis financial problem “has become a challenge for so many of our nation’s communities and the banks that serve them.”
“The bipartisan SAFE Banking Act would be an important step toward enabling financial services for cannabis-related businesses,” ABA wrote. “The SAFE Banking Act is not a cure all for the cannabis banking challenge, but it is a measure that helps clarify many issues for the banking industry and regulators.”
“Providing a mechanism for the cannabis industry to access the banking system would help those communities reduce cash-motivated crimes, increase the efficiency of tax collections, and improve the financial transparency of the cannabis industry,” the group said.