Legislation introduced in the U.S. Senate this week would ban federal regulators from penalizing banks that provide services to the cannabis industry.
U.S. Sens. Jeff Merkley, D-Ore., and Cory Gardner, R-Colo., introduced the SAFE Banking Act along with 20 Senate co-sponsors on Thursday.
The authors said the measure would specifically restrict banking regulators from terminating federal deposit insurance solely because a bank provides services to a regulated cannabis business, as well as prohibit regulators from taking actions on loans to cannabis business owners.
Banks could still choose not to offer those services.
Supporters argue that because banks currently face penalties for providing services to cannabis businesses, many of those businesses are forced to operate using large amounts of cash — which Merkley called “an invitation to robbery, money laundering and organized crime.”
The measure was endorsed by cannabis industry groups as well as banking, real estate and insurance organizations. A House committee passed a version of the bill last month.
“Lack of access to financial services is creating public safety problems for the rapidly growing legal cannabis industry, as well as interfering with transparency and access to capital for small businesses,” said National Cannabis Industry Association Executive Director Aaron Smith.