House Passes Financial Services Cannabis Legislation

On Wednesday, the U.S. House of Representatives overwhelmingly passed Big “I” supported legislation designed to protect banks, insurers and insurance agents from federal penalties if they provide financial services to cannabis-related businesses legalized at the state level. H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act by Reps. Ed Perlmutter (D-Colorado) and Steve Stivers (R-Ohio) passed with a vote count of 321-103.

The SAFE Banking Act attempts to reconcile federal law with conflicting cannabis-related state laws by providing a federal “safe harbor” to financial services providers including insurers and agents and brokers. The legislation would prevent criminal prosecution and civil liability against agents and brokers who choose to engage with “cannabis-related legitimate businesses.” It would also provide clarity for transactions involving these businesses.

Under current federal law, the cultivation, possession and distribution of marijuana is illegal, except for some limited research purposes. However, at the state level, all but a handful of states permit medical marijuana use in some capacity and several states now allow the sale of marijuana for recreational purposes.

The Big “I,” along with its industry partners, worked diligently to include the insurance protections in the SAFE Banking Act and is pleased with this step toward legal clarity for agents and brokers. A group of insurance trade associations sent a letter thanking Rep. Perlmutter for his work to include insurance businesses in the safe harbor provisions and supporting passage of this legislation.

The SAFE Banking Act now moves over to the Senate for consideration. The Big “I” will work to encourage its passage in the Senate, as well as other legislative efforts to ensure legal protections for agents and brokers.

Joseph Cortina is Big “I” director, federal government affairs.