CUNA, CUs say most of Crapo’s concerns can be addressed in SAFE Banking Act

February 7, 2020

The Secure and Fair Enforcement (SAFE) Banking Act can be modified to address most of is generally consistent with Senate Banking Chair Sen. Mike Crapo’s (R-Idaho) concerns in a manner consistent with the narrow objectives the bill was designed to achieve, CUNA wrote to Crapo Friday. 

In response to the Chair’s request for feedback on the cannabis legislation, CUNA noted that-with the exception of the Chairman’s proposal to add public health and safety requirements to the enforcement responsibilities of financial institutions-the SAFE Banking Act is already consistent with the Chair’s positions and would benefit from his proposed clarification language reinforcing the bill’s intent.

CUNA urged the Chairman to advance the bill through the consideration process in order to allow his proposed changes to be offered as amendments that all of the members of the Senate Banking Committee can vote upon and responded to a series of proposals Crapo issued on the SAFE Banking Act and urged him to continue to advance the bill through the Senate Banking Committee’s consideration process.

Specifically, the legislation would provide protections for financial institutions that serve cannabis businesses and ancillary businesses in places where cannabis is legal. CUNA testified in support of the bill in front of House and Senate members last year, and the House passed the bill in September.

 “Enactment of this bill would offer much-needed, narrowly targeted federal protections for credit unions and other financial institutions who accept deposits from, extend credit to, or provide payment services for an individual or business engaged in cannabis-related commerce in states where the activity is legal--as long as the activity is compliant with all other applicable laws and regulations," the letter reads. "CUNA strongly believes that federal legislation providing these protections is essential to bringing revenue from state-sanctioned cannabis entities and hemp businesses into the financial services mainstream and, as a result, keeping communities safe by removing vast amounts of cash off the streets.”

CUNA notes that neither it nor its members take a position on the legalization or decriminalization of cannabis. Rather, CUNA believes that the conflict between federal law and the laws in 33 states and District of Columbia that allow sales of cannabis, creates compliance challenges that require Congress’s immediate attention. recognizes the compliance issues that arise with the 33 states and District of Columbia that allow sales of cannabis, but it being illegal at the federal level.

The letter also notes:

  • CUNA welcomes Crapo’s recommendation that the Treasury’s Financial Crimes Enforcement Network (FinCEN) be required to issue a rulemaking covering the same scope ast FinCEN’s 2014 guidance, which would be rendered outdated with the passage of the SAFE Banking Act;
  • CUNA believes the SAFE Banking Act would not facilitate the interstate cannabis commerce of cannabis, as illustrated in Section 4(a) of the bill, but would be willing to support the additional inclusion of additional language reinforcing that interpretationsaying the bill does not authorize interstate commerce;
  • CUNA believes that the existing language of the Financial Institution Consumer Protection Act, which was cosponsored by Crapo ands included in the SAFE Banking Act, is preferable to a provision from Crapo’s recent proposal tohat would exclude reputational risk as an Iunsafe or unsound practice in order to protect institutions’ ability to rely upon their own internal risk assessments; and
  • CUNA and its member credit unions support Crapo’s recommendation to continue to include the House hemp provisions in the SAFE Banking Act in any legislation that moves forward in the Senate.