WASHINGTON–The Senate Banking, Housing, and Urban Affairs Committee passed the credit union-supported Secure and Fair Enforcement Regulation (SAFER) Banking Act with a 14-9 vote.
As CUToday.info has reported, the bill would provide a safe harbor for financial institutions and employees serving legal cannabis-based businesses. Cannabis currently remains illegal under federal law, leading most financial institutions to decline service to the businesses.
“We thank the committee for moving forward on this important legislation to bring consistency and common-sense to the intersection of banking regulation and legal cannabis businesses,” said CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak. “This bill will allow credit unions to lawfully serve these businesses and addresses the serious public safety issue of forcing these businesses to deal in only cash.”
A bipartisan group of senators—including Senate Majority Leader Chuck Schumer (D-NY)—introduced the bill last week. It is an updated version of the credit union-supported SAFE Banking Act, which was introduced in both chambers earlier this year, and passed the House seven times in previous Congresses but never passed in the Senate.
'Legislation is Necessary'
“After today’s committee passage of the SAFER Banking Act, NAFCU thanks Senator Brown and members of the Senate Banking Committee for their leadership on this issue and willingness to make changes to address concerns raised by credit unions and other community financial institutions," said NAFCU Senior Vice President of Government Relations Greg Mesack. "This legislation is necessary to protect credit unions and the communities they serve in states where legal cannabis businesses are seeking financial services. It will help reduce risks by providing some legal clarity and expanding access to deposit accounts and other financial products. NAFCU looks forward to continuing the conversation as the bill moves forward to a full body vote.”
NAFCU Sends Letter
Ahead of today’s mark-up, NAFCU sent a letter to committee urging several potential revisions to the bill it said would provide greater clarity and certainty.
In the letter, NAFCU Vice President of Legislative Affairs Brad Thaler specifically addressed concerns in section 10 of the bill, which is related to federal banking regulators’ authorities.
‘Dramatic’ Increase in Authorities
“NAFCU supports the intent of this bill, but we are concerned that the new language in the base text could be read to dramatically increase regulators’ authorities and discretion, which could have a significant impact on credit unions,” Thaler wrote. According to NAFCU, it is concerned some of the provisions could:
- Add regulatory burdens and regulator overreach, especially as it relates to ways in which financial institutions should engage with consumers to “increase access”
- Give financial regulators too much discretion in terminating a deposit account, which NAFCU said should only be based on violations of the law, unsafe or unsound practices, or violations of exam-related issues
- Lead to varying notice requirements across the banking regulators.
Should be Part of Survey
In addition, NAFCU said NCUA should be added to the biennial survey on accessing deposit accounts for businesses – a stipulation of section 10.
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