What Does the SAFE Banking Act mean for Businesses?

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) was passed in 2008 in response to the housing market crash. The act created new requirements for mortgage originators, which includes anyone who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan. Basically, it helps protect consumers from fraudulent lenders.

The SAFE Banking Act is similar in that it aims to protect consumers from fraud and abuse, but this time it’s focused on the banking industry. The act creates a framework for banks to provide services to cannabis-related businesses (CRBs) without being penalized by federal regulators. In other words, it would allow banks to work with CRBs without fear of being shut down or losing their FDIC deposit insurance.

A potential solution to the marijuana banking quandary would be to decriminalize the manufacture, distribution, or possession of marijuana by removing it from Schedule I of the Controlled Substances Act. In April, the United States House of Representatives passed a bill that would do just that: the Marijuana Opportunity Reinvestment and Expungement Act (MORE).  The Senate received the MORE Act on April 4, 2022 and referred it to the Finance Committee; however, the MORE Act has not been released from said committee or voted upon by the Senate. On July 21, 2022, in Contrast, The Cannabis Administration and Opportunity Act was introduced by the senate which would also decriminalize marijuana use. Despite this though, it is unclear if there is enough support for such a bill to pass.

The act has been met with mixed reactions. Some people feel that it doesn’t go far enough in protecting CRBs, while others worry that it could lead to an increase in crime. Regardless of how you feel about the act, it’s important to understand what it could mean for businesses.

How Would the SAFE Banking Act Affect Businesses?

If the SAFE Banking Act is passed, it could have a number of implications for businesses, both positive and negative. First, let’s take a look at some of the potential positives:

  • Banks would be able to work with CRBs without fear of losing their FDIC deposit insurance. This would give CRBs access to much-needed capital, which could help them expand their businesses.
  • It would create more opportunities for investment in the cannabis industry. Investors would no longer have to worry about putting their money into an industry that is considered “high risk” by banks.
  • It would allow businesses to open up bank accounts and accept credit and debit cards. Currently, many CRBs are forced to operate on a cash-only basis, which makes them prime targets for crime. With the passage of the SAFE Banking Act, they would finally be able to participate in the mainstream financial system.

Now let’s take a look at some of the potential negatives:

  • It could lead to an increase in money laundering and other crimes associated with the cannabis industry. If banks are allowed to work with CRBs, criminals will undoubtedly find ways to exploit this new system.
  • There is a chance that the law could be overturned by future administrations. Given the current political climate, this is definitely a possibility. If that happens, all of the progress that has been made could be lost overnight.

At the end of the day, only time will tell how effective the SAFE Banking Act will be in practice. Until then, businesses should tread cautiously and make sure they are prepared for any potential changes that may come as a result of its passage.


The SAFE Banking Act is a controversial piece of legislation that has yet to be passed into law. If it is enacted, it could have major implications for businesses both large and small. While there are many potential positives associated with the act, there are also some potential negatives that should not be ignored. Until the bill becomes law (if it ever does), businesses should keep a close eye on its progress and make sure they are prepared for any changes that may come as a result of its passage into law.”

At Global Legal Law Firm, our lawyers are familiar with the rapidly changing nature of electronic payments processing, and the ever changing regulations involved, with decades of expertise in ISOs, processors, commercial collections, credit card brands, and other forms of electronic payment processing litigation. Let us guide you through this new and volatile environment, rather than attempting to navigate it on your own.

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