SAFE Banking Act & Cannabis Banking

SAFE Banking Act 2026: Bill Status, Key Provisions and What It Means for Cannabis Banking

The Secure And Fair Enforcement (SAFE) Banking Act is federal legislation that would let banks, credit unions and insurers serve state-legal cannabis businesses without risking federal penalties. In the current 119th Congress it is the SAFE Banking Act of 2026: S. 4942, introduced June 24, 2026 by Sen. Jeff Merkley (D-OR) with Sens. Lisa Murkowski (R-AK), Elizabeth Warren (D-MA) and Steve Daines (R-MT), and the House companion H.R. 9471, introduced June 25, 2026 by Rep. David Joyce (R-OH). The SAFE Banking Act is not law. As of October 2026, both bills remain in committee.

Key Takeaways (October 2026)

• Status: S. 4942 is before the Senate Committee on Banking, Housing, and Urban Affairs, and H.R. 9471 was referred to a House Financial Services subcommittee on July 17, 2026. No markup or floor vote has been scheduled.
• Safe harbor: Federal banking regulators could not terminate deposit insurance, take supervisory action or discourage banks solely because they serve state-sanctioned marijuana businesses, hemp businesses or their service providers.
• Money laundering: Proceeds from state-compliant cannabis businesses would no longer be treated as unlawful proceeds solely because of their source.
• FinCEN: Treasury would have 180 days to update FinCEN’s 2014 marijuana guidance or issue new guidance.
• Not legalization: The bill does not legalize cannabis, change state law or require any bank to serve the industry.
• Until it passes: Cannabis banking still runs on FinCEN guidance and strict BSA/AML compliance.

SAFE Banking Act History: From House Passage to the 2026 Bill

• 2019 and 2021: The SAFE Banking Act, long championed by Rep. Ed Perlmutter (D-CO), passed the U.S. House in September 2019 and again in April 2021, each time with 321 votes, but never received a Senate vote.
• September 27, 2023: The Senate Banking Committee advanced a revised version, the SAFER Banking Act (S. 2860), on a bipartisan 14-9 vote. It is still the furthest a cannabis banking bill has gone in the Senate, but it never reached the floor and expired with the 118th Congress.
• June 2026: Senators Merkley, Murkowski, Warren and Daines reintroduced the bill as the SAFE Banking Act of 2026, and Rep. Joyce introduced the House version. The 2026 bill carries forward most of the SAFER-era provisions.

What the SAFE Banking Act of 2026 Would Do

Based on the introduced bill text, the SAFE Banking Act of 2026 would:

• Create a safe harbor for depository institutions (Sec. 3): bar federal regulators from terminating or limiting deposit or share insurance, or taking adverse supervisory action, solely because a bank or credit union serves a state-sanctioned marijuana business, its service providers, owners or employees.
• Protect cannabis proceeds (Sec. 4): provide that proceeds from a state-compliant marijuana business are not unlawful proceeds under federal money-laundering statutes solely because of that involvement.
• Shield financial institutions and insurers (Sec. 5): protect banks, credit unions, CDFIs, insurers, Federal Reserve Banks and Federal Home Loan Banks, and their officers and employees, from federal liability for providing services, and protect lenders’ collateral from forfeiture.
• Update SAR filing rules (Sec. 6): require Suspicious Activity Reports on cannabis customers to follow new Treasury guidance, which must update FIN-2014-G001 within 180 days.
• Standardize bank examinations (Sec. 7): direct the FFIEC to issue uniform guidance and exam procedures within 180 days, and allow “legacy” cash deposits received in the 90 days before a banking relationship begins when their source is documented.
• Cover hemp and CBD (Secs. 8 and 14): require regulators to update hemp banking guidance within 90 days and extend most protections to hemp-related legitimate businesses.
• Treat cannabis income fairly for home loans (Sec. 9): count income from a state-sanctioned marijuana business like other legal income for FHA, VA, USDA, Fannie Mae and Freddie Mac mortgages on a primary residence.
• Limit account terminations (Sec. 10): bar federal agencies from ordering account closures without a written justification that is not based primarily on reputational risk.
• Study access and inclusion (Secs. 11-13): require annual reports on access to financial services for minority-owned, women-owned, veteran-owned and small cannabis businesses, and GAO studies on market barriers and SAR effectiveness.

What the SAFE Banking Act Would Not Do

The bill does not legalize or reschedule marijuana, does not override state cannabis laws and expressly does not require any financial institution to serve the industry (Sec. 15). Banks would still conduct due diligence, monitor accounts and file reports. It also does not change federal tax law, so Section 280E questions are handled separately through rescheduling.

Rescheduling vs. the SAFE Banking Act

Federal marijuana policy did move in 2026, just not through Congress. Effective April 28, 2026, the Justice Department and DEA placed FDA-approved marijuana products and marijuana subject to a qualifying state medical license in Schedule III (Federal Register). Licensed medical operators gain a DEA registration pathway and are expected to move out from under Section 280E going forward. Adult-use marijuana remains in Schedule I. A broader proceeding to reschedule all marijuana held hearings in June and July 2026, but it was stayed on September 29, 2026 and no final decision has been issued.

Rescheduling does not make state-licensed cannabis sales federally legal, and it does not by itself create a banking safe harbor. That is why the SAFE Banking Act remains the central cannabis banking bill in Congress, even for medical operators.

How Cannabis Banking Works Today Without a Federal Safe Harbor

Until Congress acts, banks serving marijuana-related businesses (MRBs) follow FinCEN’s 2014 guidance (FIN-2014-G001). That means enhanced due diligence on licenses, ownership and operations; ongoing monitoring of account activity; Marijuana Limited, Priority and Termination SAR filings; and Currency Transaction Reports for cash over $10,000. With $29.1 billion in state-legal cannabis sales in 2025 and an estimated 412,500 full-time workers in the industry (NORML), the pressure on Congress to finish the job continues to build.

How Cannabis Businesses Can Prepare for the SAFE Banking Act

• Keep transparent financials and clean audit trails that reconcile with your seed-to-sale system.
• Document ownership, management and beneficial owners clearly.
• Use automated cash tracking and bank-integrated accounting tools.
• Stay current with state and local cannabis licensing, tax and security rules.
• If you hold medical licenses, track your DEA registration and keep medical and adult-use activity separate.

What This Means for Banking a Cannabis Business in 2026

You don’t need to wait for Congress to bank your cannabis business. Herring Bank already serves cannabis operators nationwide under FinCEN guidance and BSA/AML requirements, with:

• Business checking and escrow accounts
• Cash pickup and delivery through our preferred armored courier
• Payroll, ACH, wires and electronic tax payments
• Digital banking with cannabis-friendly integrations
• Commercial real estate loans up to 50% loan-to-value

Ready to move from cash to compliant cannabis banking? Call 877-873-0079 or contact Herring Bank’s cannabis banking team for a personalized onboarding plan.

Frequently Asked Questions

What is the Safe Banking Act?
The Safe Banking Act, officially the Secure And Fair Enforcement Banking Act (reintroduced in the 119th Congress as the SAFE Banking Act of 2026), is legislation designed to facilitate banking and financial services for the cannabis industry by providing federal protection for financial institutions that offer services to cannabis-related businesses operating legally under state laws.

How does the Safe Banking Act protect financial institutions?
The Act would provide “safe harbor” protections for banks, lenders, and insurers, preventing federal banking regulators from penalizing these institutions for offering their services to legitimate cannabis businesses. This includes protections against terminating deposit insurance, asset forfeiture, and other punitive actions related to serving the cannabis industry​ (Congress.gov – S. 4942)​​ (SAFE Banking Act of 2026 bill text (GovInfo))​.

Will the Safe Banking Act increase access to financial services for the cannabis industry?
If enacted, yes. By ensuring financial institutions can serve cannabis-related businesses without fear of federal penalties, the Act is expected to significantly increase the accessibility of banking, lending, and insurance services for the marijuana industry, thereby enhancing operational efficiencies and security for these businesses​ (The National Law Review)​.

What are the main provisions of the Safe Banking Act?
Key provisions of the SAFE Banking Act of 2026 include prohibiting federal banking regulators from penalizing financial institutions for serving cannabis businesses, clarifying that proceeds from legitimate cannabis business transactions are not considered unlawful, and providing protections against asset forfeiture for banks providing loans or other services to the cannabis industry​ (Congress.gov – S. 4942)​.

What is the SAFER Banking Act?
The SAFER Banking Act was the 2023 Senate version of this legislation (S. 2860), which the Senate Banking Committee advanced but which never received a floor vote. It aimed to provide legal cannabis businesses access to essential banking services such as bank accounts, credit cards, and checks. It sought to protect financial institutions that serve these businesses from federal penalties. Its provisions now carry forward in the SAFE Banking Act of 2026 (S. 4942 / H.R. 9471).

Who supported the SAFER Banking Act?
Colorado U.S. Senators Michael Bennet and John Hickenlooper, among other bipartisan group of senators, supported the 2023 SAFER Banking Act, highlighting its importance for public safety and financial inclusivity for cannabis businesses.

Why is the SAFE Banking Act necessary?
Currently, due to federal law, cannabis businesses are largely forced to operate on a cash basis, posing significant safety risks and creating challenges for compliance and oversight. The SAFE Banking Act of 2026 aims to bring banking laws into the 21st century, allowing these businesses to access the banking system and enhance safety for their customers and employees.

How would the SAFE Banking Act promote public safety?
By allowing cannabis businesses to shift away from cash-reliant operations, the Act aims to reduce the opportunity for crime associated with large amounts of cash. In Denver, for instance, a significant percentage of marijuana industry-related offenses have been burglaries or attempted burglaries.

What impact would the SAFE Banking Act have on communities of color?
The Act recognizes the importance of inclusivity within the cannabis industry for communities of color. It would extend protections to Community Development Financial Institutions and Minority Depository Institutions, which serve marginalized communities, making it easier for these communities to participate in the industry.

What changes did the SAFER Banking Act introduce?
The 2023 SAFER Banking Act, an update to the previously introduced SAFE Banking Act, included provisions for financial institutions to foster banking relationships within their communities. It also aimed to expand surveys on unbanked and underbanked small and medium-sized businesses, enhancing financial inclusivity.

What is the status of the SAFE Banking Act?
The Senate Banking Committee advanced the SAFER Banking Act 14–9 in September 2023, but it never received a floor vote. The bill was reintroduced in June 2026 as the SAFE Banking Act of 2026 (S. 4942 in the Senate, H.R. 9471 in the House), and as of October 2026 both versions remain in committee. The U.S. House of Representatives passed the SAFE Banking Act multiple times in prior Congresses, indicating strong bipartisan support for banking reforms in the cannabis industry.

Herring Bank, offering a suite of financial services for cannabis-related businesses (CRBs) in alignment with FinCEN guidance and BSA/AML requirements, showcases effective navigation through the cannabis banking environment. Catering specifically to the burgeoning cannabis industry, Herring Bank provides comprehensive banking solutions that include checking and savings accounts, online banking capabilities, sophisticated cash management tools, and commercial real estate loans for cannabis businesses at up to 50% loan-to-value. Their offerings demonstrate a keen understanding of the unique challenges and regulatory requirements faced by the cannabis sector, underscoring their dedication to enhancing compliance and operational efficiency for entities involved in cannabis banking.