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Federal Cannabis SAFE Banking Act Bill Gains Steam with Backing from Michigan Financial Institutions and Government

In March 2021, revised versions of the bill were introduced in the U.S. House and Senate, and the House version passed in April with significant bipartisan support (a vote of 321-101).


In September 2019, the U.S. House of Representatives passed the Secure and Fair Enforcement Banking Act of 2019 (“Safe Act”), which would prohibit regulators from terminating or limiting either deposit or share insurance of a financial institution for doing business with a cannabis company. It would also prohibit regulators from barring such institutions from offering financial services to cannabis companies and stop regulators from encouraging financial institutions to not do business with those companies.

In March 2021, revised versions of the bill were introduced in the U.S. House and Senate, and the House version passed in April with significant bipartisan support (a vote of 321-101).

Currently, cannabis businesses, including those in states such as Michigan where selling cannabis is legal, have extremely limited access to banking services. Many banks are concerned with violating federal anti-money laundering and other laws by engaging in transactions with the proceeds of federally illegal marijuana operations.

The SAFE Act is meant to enable financial institutions and “cannabis-related legitimate businesses” to do business without running afoul of federal law. A cannabis-related legitimate business is defined by the SAFE Act as a manufacturer, producer, person or company that participates in a business or organized activity handling cannabis or cannabis products pursuant to a state’s law legalizing cannabis-related business or activities.

The Community Bankers of Michigan and Michigan Credit Union League both support passage of the SAFE Act. The bill has also received support from Michigan politicians. In April, Governor Whitmer joined 20 other governors in urging Congress to pass the legislation.

In a statement, Governor Whitmer said: “Michiganders voted overwhelmingly to legalize the use of recreational marijuana in 2018, and we must respect the will of the voters. Although legalization continues rolling on nationwide, we still have federal laws on the books that prohibit financial institutions from working with marijuana businesses legally under state law. To be blunt, legalization is great for the economy: it creates jobs and boosts tax revenue that can go towards our schools, communities, and first responders. This legislation ensures that Michigan’s marijuana businesses can grow and access the same resources that all legal businesses can.”

The fate of the SAFE Act resides in the closely divided U.S. Senate, where its passage is uncertain. One of the concerns expressed by Mike Tierney, president and CEO of the Community Bankers of Michigan, is that instead of passing the SAFE Act, the Democrat-controlled Senate will push for full legalization of cannabis instead of the more narrowly tailored SAFE Act.

We will continue to keep you apprised of new developments related to this legislation, which has important implications for the cannabis and banking industries in Michigan. If you have any questions about these issues we are here to assist. Please contact Klint Kesto or your Fraser Trebilcock attorney.


Fraser Trebilcock attorney and former Michigan State Legislator Klint Kesto has nearly two decades of experience working in both the public and private sectors, including serving as Co-Chair of the CARES Task Force. You can reach him at kkesto@fraserlawfirm.com or 517.377.0868.