Failure of banking act means challenges for hemp producers will linger

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The U.S. Congress has failed to act on a banking bill that would have led the way to financial services for hemp and marijuana companies.

The bill, the Secure and Fair Enforcement (SAFE) Banking Act, will not be part of an omnibus spending package after Majority Leader Chuck Schumer, a Democrat from New York, didn’t call it to a vote in the Senate.

Passage was expected

While marijuana industry representatives had conceded that a broader measure on cannabis would not be passed by the current Congress, they had tipped the SAFE Act for passage.

The House of Representatives has seven times passed the banking measure, which would let banks provide financial services to hemp producers without more strict compliance standards set for the marijuana industry, most recently this past July.

Banks’ reluctance

The act, which addresses banking issues generally, includes language that would clear the way for hemp stakeholders’ to get loans, open bank accounts and use credit card services — all of which have been difficult for hemp firms to obtain despite full legalization of hemp brought on by the 2018 Farm Bill. 

Under the Farm Bill, banks and payment processing companies already have the legal coverage they need to service industrial hemp companies, but many have been reluctant to do so.

Earlier deal failed

Banks want to serve hemp and marijuana producers, but say they need assurance from regulators that hemp is distinguishable from marijuana, the American Bankers Association has said.

Democrat lawmakers led by Schumer had hoped to tack the banking measure onto the annual defense spending bill earlier this year. But a deal for inclusion fell apart amid pushback by Senate Minority Leader Mitch McConnell, Kentucky, and Sen. Chuck Grassley, Iowa, both Republicans.

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