In 2023, historic strides were made in the efforts to pass federal legislation to protect financial institutions that do business with the cannabis industry. The SAFE Banking Act is a bill that aims to protect banks that serve legal cannabis businesses from federal penalties. The bill was first introduced in 2019 and passed the House of Representatives numerous times but stalled in the Senate during each session. That was, until this year. The Senate Banking Committee, by a notable bipartisan majority of 14-9, on September 27, passed their version of the bill (The SAFER Act) out of committee. The bill, SB. 2860 now goes to the Senate floor sometime for consideration, but roadblocks remain on its future in that chamber.
Despite the uncertainty in the Senate, a bipartisan group of lawmakers is engaged in ongoing negotiations, fueling optimism for potential passage in the new year. However, tensions are high among House Republicans, particularly those dissatisfied with alterations made by the Senate to a bill that the lower chamber had passed seven times. Additionally, the replacement of House Speaker Kevin McCarthy, who had previously supported the cannabis banking bill, with a new speaker who opposes it adds another layer of complexity to the legislative landscape.
The bill’s primary hurdles stem from inter-chamber disagreements rather than strict partisan divides. While the initial bill received substantial bipartisan support in the House, the Senate introduced changes to address concerns raised by key Democrats regarding potential limitations on regulators in combating fraud. The Senate version of the bill enjoys bipartisan support, with backing from both conservative and Democratic lawmakers. However, House Republicans remain divided on the acceptability of the changes made by the Senate, which has complicated the negotiation process.
Despite ongoing policy disagreements, lawmakers remain cautiously optimistic about the bill’s prospects. Nevertheless, challenges persist as Majority Leader Chuck Schumer has not scheduled the bill for floor consideration, with little room for non-essential issues given the ongoing immigration talks and disputes over funding for Ukraine and Israel. Looking ahead, the passage of the cannabis banking bill in early 2024 appears contingent on overcoming legislative challenges and finding a suitable window in the Senate’s agenda.