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Wednesday, September 20, 2023 6:47:41 PM
Some of the highlights.
{My Note the 1 year for the FDIC to develop guidance seems like a little too padded. }
“This bill will take cannabis banking out of the shadows and give access to the banking system to thousands of small businesses. With the addition of HOPE, it will take a needed step toward restorative justice,” the senator added “For too long, our laws involving marijuana have undermined the ability for small businesses and entrepreneurs from all backgrounds to succeed on a more level playing field with the wealthy and highly capitalized corporations. And for too long, the prohibition on marijuana has disproportionately targeted low-income, minority, and disadvantaged communities. Finally, we have a bill that is moving us in the right direction and making meaningful strides toward justice.”
The newly released bill reveals the types of compromises senators made over recent weeks. Most of the new provisions are described under Section 10—a component of the reform that Republicans have strongly favored and certain Democrats opposed over concerns it could undermine broader banking regulations.
Here are some of the key changes from the previous Secure and Fair Enforcement (SAFE) Banking Act:
In Section 7, the SAFER Banking Act omits earlier language preventing federal regulators from taking action that “discourages” financial institutions from working with state-legal marijuana businesses.
However, Section 10 of the bill now spells out how regulators must broadly have a “valid” reason for requesting or requiring the termination of bank accounts for any business.
It was revised to give the Federal Deposit Insurance Corporation (FDIC) one year, rather than 180 days, to develop guidance for financial institutions serving state-licensed marijuana businesses.
The original bill said that income derived from state-legal cannabis business activity couldn’t be used to deny “federally backed mortgages.” That’s been revised to say that standard applies to a “covered” mortgage. A new example of such a covered mortgage is one that’s “acquired or purchased by a Federal Home Loan Bank or pledged as collateral for an advance from a Federal Home Loan Bank.”
Section 10 has been expanded, for example to include a “sense of Congress” language stipulating that the personal and political beliefs of financial regulators should not influence their decision making.
The legislation would newly require federal banking regulators to work with state banking supervisors and the secretaries of commerce and treasury and, within two years of enactment, form rules or guidance to increase access to deposit accounts for businesses and customers and to enable banks and credit unions to more effectively maintain customer relationships—especially for those in rural, low-and moderate-income areas, Tribal communities and unbanked businesses and consumers.
There’s a new requirement for the Federal Deposit Insurance Corporation (FDIC) to conduct a biennial survey and report to identify barriers to accessing deposit accounts for small-and medium-sized businesses.
Further, the bill has been revised to include explicit mention of tribal communities in Section 11, which requires federal regulators to submit a report to Congress on access to banking for historically underbanked communities. Tribes are now listed beside minorities, veterans, women and small state-sanctioned cannabis businesses as subjects of that report—which is not the case in the Secure and Fair Enforcement (SAFE) Banking Act as introduced.
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