The SAFE Banking Act, which would enable financial institutions to provide depository services to cannabis-related businesses, was approved by the House Committee with a 45–15 majority last week.
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The act will protect financial institutions from penalties from federal regulators for providing services to businesses that operate cannabis-related operations. Because cannabis is still illegal at the federal level in the US, financial institutions may face adverse action if they engage in business with cannabis-related operators. Not only does the SAFE Banking Act of 2019 permit institutions to offer financial services to cannabis-related businesses, but it also allows institutions to offer services to employees of the business as well.
Enabling lending services
The act will also open the doors for financial institutions to lend to legitimate entities that are connected to cannabis-related businesses, which is important for growing companies that could use loans from banks to expand their operations and capitalize on the burgeoning industry in the US. The financial institutions also would not have to risk penalty if they perform clearing services including card payments or funds transfers connected to a cannabis-related entity that operates legitimately.