Seven years, seven House votes, and zero Senate floor votes later, the SAFE Banking Act is back. On June 24, 2026, Senator Jeff Merkley (D-OR) filed the Secure and Fair Enforcement (SAFE) Banking Act of 2026 in the Senate. Representative Dave Joyce (R-OH) filed the House companion the next day.
The bill’s text is familiar. The world around it is not. Since the last serious push, the federal government has moved medical cannabis out of Schedule I, opened a rescheduling hearing on everything else, and — in a move that blindsided an entire adjacent industry — set a hard deadline to outlaw most hemp-derived THC products.
So: flood gates, or another lap around the track?
What the SAFE Banking Act of 2026 Actually Does
The Senate version is S. 4942, sponsored by Merkley and cosponsored by Senators Lisa Murkowski (R-AK) and Elizabeth Warren (D-MA), among others. The House version is H.R. 9471, introduced by Joyce with seven bipartisan cosponsors: Jim Himes (D-CT), Warren Davidson (R-OH), Nydia Velázquez (D-NY), Brian Mast (R-FL), Lou Correa (D-CA), Guy Reschenthaler (R-PA), and Dina Titus (D-NV). It was referred to the House Financial Services, Judiciary, and Veterans’ Affairs committees.
The core mechanism hasn’t changed since 2019. The bill would bar federal banking regulators from:
- Prohibiting or discouraging a bank from serving a state-legal cannabis business
- Terminating or limiting a bank’s federal deposit or share insurance primarily because it serves such a business
- Recommending or incentivizing a bank to halt or downgrade services to those customers
- Taking action on a loan to a state-legal operator or owner
What it does not do is legalize anything. It is a shield for financial institutions, not a change to the Controlled Substances Act.
What Changed: Rescheduling Arrived — Sort Of
This is the development that reframes the entire conversation.
On December 18, 2025, President Trump issued an executive order directing the Attorney General to expedite marijuana rescheduling. On April 23, 2026, Acting Attorney General Todd Blanche signed a final order — effective April 28 — moving two categories from Schedule I to Schedule III: marijuana contained in FDA-approved drug products, and marijuana subject to a state-issued medical marijuana license.
That is genuinely historic. It is the first time since 1970 that the federal government has acknowledged accepted medical use for cannabis. And it carried a concrete financial benefit: Section 280E of the Internal Revenue Code, which bars businesses trafficking in Schedule I or II substances from deducting ordinary expenses, no longer applies to state-licensed medical operators.
But read the order carefully and the limits are stark. Unlicensed bulk marijuana, most extracts, and — critically — the entire adult-use market remain in Schedule I. An operator holding both a medical and an adult-use license is now navigating a single plant that sits in two different schedules simultaneously.
The remainder went to a formal hearing. DEA Chief Administrative Law Judge Derek Julius presided over 17 days of testimony from June 29 to July 15, 2026, on whether marijuana more broadly should move to Schedule III. In an unusual posture, the DEA argued for rescheduling while the seven outside participants it selected — including Smart Approaches to Marijuana and the states of Nebraska, Idaho, Indiana, and Louisiana — opposed it.
Post-hearing briefs are due August 17. After that, Judge Julius issues a recommendation, and the DEA Administrator decides. There is no statutory deadline for either step. Meanwhile, a consolidated challenge to the April order is pending in the D.C. Circuit, arguing the DOJ skipped required notice-and-comment procedures.
Why Rescheduling Doesn’t Solve the Banking Problem
Here is the point most headlines missed: Schedule III reduces risk. It does not create a safe harbor.
Banks serving cannabis businesses still operate under the Bank Secrecy Act. They still file suspicious activity reports — an initial SAR within 30 days of onboarding a cannabis client, then continuing SARs every 90 days. The governing framework is still FinCEN’s 2014 guidance, which is compliance guidance, not a statutory protection and not an obligation for any bank to take cannabis clients. That guidance has never been updated.
As of July 1, 2026, none of the federal banking agencies — FinCEN, the OCC, the FDIC, or the Federal Reserve — had publicly issued cannabis-specific guidance revised for the post-Schedule III world.
That gap is exactly what SAFE Banking is written to fill. As Merkley put it when reintroducing the bill, legal clarity for financial institutions is still necessary even with medical marijuana’s reclassification.
The Banking Picture in 2026
There has been real, if modest, progress. FinCEN data through late 2025 shows roughly 800 to 850 depository institutions filing cannabis-related SARs, up from about 700 to 750 in 2021. Compare that to mid-2019, when the figure was 493 banks and 140 credit unions.
But the headline number flatters the situation. Many of those institutions serve only ancillary businesses — landlords, consultants, software vendors — or operate in a single state. In California, the largest legal market in the country, the number of institutions actually underwriting plant-touching operators with full commercial banking is measured in dozens.
And access is expensive. A California cannabis retailer typically pays $2,000 to $7,500 a month in banking fees, plus cash deposit fees of 0.5 to 2.0 percent. A dispensary depositing $300,000 in cash monthly at 1.5 percent pays roughly $54,000 a year simply to deposit its own receipts.
Payment processing, credit cards, lending, and insurance remain patchy to nonexistent for most operators. The services the 2019 version of this article listed as forthcoming — payment cards, EFTs, extension of credit, clearing and settlement — are still largely aspirational at scale.
The Hemp Wild Card: A Deadline Nobody Saw Coming
For hemp businesses, the story has inverted completely.
The 2018 Farm Bill defined hemp by delta-9 THC content alone, accidentally legalizing a universe of other cannabinoids — delta-8, delta-10, THCA, HHC, THC-O — and spawning an intoxicating hemp market now estimated at roughly $28 billion.
Congress closed that door. Section 781 of the FY2026 appropriations act (P.L. 119-37), signed November 12, 2025, redefines hemp using a total-THC standard (delta-9 plus 0.877 × THCA) capped at 0.3% by dry weight, caps finished consumable products at 0.4 mg of total THC per container, and excludes synthesized cannabinoids outright. The provisions take effect November 12, 2026.
The U.S. Hemp Roundtable estimates the new definition would eliminate roughly 95% of existing hemp cannabinoid products — an industry supporting around 300,000 jobs and about $1.5 billion in annual state tax revenue. Industrial hemp for fiber, grain, and building materials is untouched. Broad-spectrum and isolate CBD survive. Most of the wellness aisle does not.
Relief efforts exist. The Hemp Planting Predictability Act (H.R. 7024, Rep. Jim Baird, R-IN) and its Senate companion (S. 3686, Senators Klobuchar, Paul, and Merkley) would push the effective date to November 2028. As of mid-2026, neither has cleared its chamber. The executive branch has signaled interest in preserving CBD access, which may produce a partial carve-out.
The irony is hard to miss: for the hemp sector, banking access could arrive at almost exactly the moment its flagship products become contraband.
Will It Pass This Time?
Honest answer: the odds are better than they’ve ever been, which is not the same as good.
Arguments for: The bill is bicameral and bipartisan from day one. The American Bankers Association is publicly urging Congress to advance it, alongside credit union and community banking groups. The administration has actively pushed rescheduling forward, removing the “the White House won’t back it” objection that shadowed earlier attempts. And the Senate came closer in 2023 than ever before — the retooled SAFER Banking Act cleared the Senate Banking Committee 14-9 in September 2023.
Arguments against: It cleared that committee and then died anyway. Seven House passages have produced exactly zero Senate floor votes. The bill has just been referred to three separate House committees, which is where these proposals historically go to sit. It’s an election year with limited floor time. And a real political argument has emerged that Schedule III already delivered the important win, reducing the urgency to spend capital on banking.
What Operators Should Do Now
Don’t build a capital structure that assumes federal banking reform arrives on a schedule.
- Bank where you can today. Roughly 800 institutions serve this space. Build the relationship before you need it.
- Document rescheduling status carefully. If you hold both medical and adult-use licenses, the tax and compliance treatment now diverges by license type. Get accounting advice specific to the split.
- Watch regulator guidance, not just Congress. Updated OCC, FDIC, Federal Reserve, or FinCEN guidance post-Schedule III would be meaningful even if SAFE Banking never moves.
- Hemp operators: plan for November 12, 2026. Reformulate, reassess supply chains, and treat delay legislation as upside rather than baseline.
- Track the August 17 briefing deadline and the ALJ’s eventual recommendation on broader rescheduling.
The Bottom Line
The flood gates metaphor may be the wrong one. What’s actually happening looks more like a series of locks — each one raising the water a little, none of them opening all at once.
Medical cannabis got 280E relief and Schedule III status. Adult-use is waiting on an administrative law judge with no deadline. Banks have more legal comfort than they did in 2019 but still no statutory safe harbor. Hemp is staring down a cliff. And the SAFE Banking Act — the reform that would actually settle the banking question — sits in committee for the eighth time.
The industry has learned to be patient. It hasn’t had much choice.
