The Secure and Fair Enforcement (SAFE) Banking Act, legislation designed to provide federal financial institutions with a safe harbor to serve the cannabis industry, has not advanced in the 119th Congress, according to a report by Cannabis Business Times. This legislative inaction persists despite the Trump administration’s April 22 order reclassifying state-licensed medical cannabis to Schedule III under the Controlled Substances Act. While the Schedule III listing acknowledges cannabis’s medicinal value and reduces some federal restrictions, it does not resolve the fundamental issues surrounding cannabis banking access or the legal risks for financial institutions, which remain subject to the Bank Secrecy Act and federal anti-money laundering laws.
Congressional Inaction on Cannabis Banking Access
The SAFE Banking Act has been a recurring legislative proposal, having advanced in various forms under Democratic leadership in the past three congresses. However, with Republican control of both the U.S. House and Senate in the current 119th Congress, the momentum for this incremental reform appears to have diminished. The reclassification of medical cannabis to Schedule III, while a significant regulatory adjustment, does not inherently address the federal illegality of cannabis for non-medical purposes, which continues to complicate financial services for the industry.
U.S. Senate Banking Committee Chairman Tim Scott, R-S.C., recently addressed the challenges of cannabis banking access at the Milken Institute Global Conference in Los Angeles. Senator Scott, who previously voted against the SAFE Banking Act due to concerns about potential loopholes in money-laundering laws, acknowledged the “quandary” faced by the industry. He stated that the SAFE Banking Act would “allow for the banking question to be solved by making it legal to bank it,” recognizing the heightened criminal activities associated with cash-only operations, as previously reported by Hemp Gazette. Despite this acknowledgment, Jeff Naft, the chairman’s communications director, indicated that it would be inappropriate to speculate on legislation not yet introduced in the current Senate.
Legislative Leadership and Committee Stances
The current Congress lacks clear sponsorship for the SAFE Banking Act. In the previous Congress, the then-Democratic-controlled House passed similar legislation seven times between 2019 and 2022, and the Senate Banking Committee advanced it in 2023. Senator Jeff Merkley, D-Ore., a proponent of cannabis reform, stated that the Schedule III reclassification still leaves cannabis businesses in violation of criminal law for nonmedical purposes, preventing full access to the banking system. Merkley’s office declined to confirm whether he plans to reintroduce the SAFE Banking Act or the broader Secure and Fair Enforcement Regulation (SAFER) Banking Act this Congress.
Senator Steve Daines, R-Mont., a former lead Republican champion for the SAFE Banking Act, announced in March that he would not seek re-election. His staff indicated that Senator Bernie Moreno, R-Ohio, a freshman on the Banking Committee, is now signaled as a potential Republican lead. In June 2025, Moreno suggested the SAFE Banking Act was “a tomorrow thing” that would move forward after budget matters. Efforts by Cannabis Business Times to obtain updates from Moreno’s staff, as well as from Senator Elizabeth Warren, D-Mass., ranking member of the Senate Banking Committee and a co-sponsor of previous versions, did not yield specific progress reports.
Operational Challenges for Cannabis Businesses
The absence of comprehensive federal cannabis banking access legislation continues to pose operational challenges for state-licensed cannabis businesses. Most financial institutions that currently service cannabis-related entities are regional actors, often charging a premium to offset the compliance risks associated with federal illegality. A 2023 Reuters report estimated that approximately 10% of banks and 5% of credit unions nationwide extend services to the cannabis sector.
The legislative impasse persists despite calls from various stakeholders. In August 2025, a bipartisan group of 32 attorneys general from 28 states, Washington, D.C., and three U.S. territories urged Congress to resolve the conflict between state-sanctioned cannabis programs and federal banking laws. In the House, Representative Dave Joyce, R-Ohio, co-chair of the Congressional Cannabis Caucus, sponsored similar legislation in the previous Congress but gained no traction under the new GOP majority. The current Senate Majority Leader, John Thune, R-S.D., who has opposed the SAFE Banking Act in prior congresses, may not need to actively block it if the legislation is not brought to the floor under Republican control.
Disclaimer: This article is for informational purposes only and does not constitute medical advice. Hemp Gazette does not provide medical recommendations, diagnoses, or treatment plans. Always consult a qualified healthcare practitioner before making any decisions regarding your health or any medical condition. Statements concerning the therapeutic uses of hemp, cannabis, or cannabinoid-derived products have not been evaluated by Australia’s Therapeutic Goods Administration (TGA). Medicinal cannabis products in Australia are accessed via prescription pathways under TGA regulation.
