House banking panel advances pot banking bill
WASHINGTON — The House Financial Services Committee approved a bill Wednesday 45 to 15 that would enable banks and credit unions to serve marijuana businesses in states where the substance is legal, despite efforts by some Republicans to delay a vote on the bill.
The Secure and Fair Enforcement, or SAFE, Banking Act, would make it illegal for a federal regulator to penalize an institution that accepts insured deposits from state-approved cannabis businesses.
All of the committee’s Democrats were joined by 11 Republicans in moving the bill out of committee.
The bill does not address the fact that marijuana is still illegal on the federal level, but supporters lauded the legislation as a good step forward in helping legitimate marijuana businesses get access to banking rather than operating in all cash.
“The people of this country sort of took it in their own hands, state by state,” said Rep. Ed Perlmutter, D-Colo., the bill's chief sponsor. “What we’ve done is draft a piece of legislation that is narrowly confined to the financial services industry.”
Backers say money-laundering concerns and other law enforcement-related issues necessitate bringing the pot industry into the banking system.
“The whole point of this bill is to make cannabis-related businesses safe for the employees, for the customers,” said Rep. Steve Stivers, R-Ohio, one of the bill’s co-sponsors.
But not everyone was on board. Rep. Patrick McHenry, R-N.C., the committee’s ranking member, and Blaine Luetkemeyer, R-Mo., attempted to stall a vote on the bill in a letter to Rep. Maxine Waters, D-Calif. They argued that more research was needed to determine how the bill impacts anti-money-laundering regulations.
But Waters pressed forward. She said supporters of the bill had been pushing the legislation for more than six years but their “pleas fell on deaf ears.”
Some Republicans argued that marijuana needs to be de-scheduled under the Controlled Substances Act before the committee considers a safe harbor for banks serving those businesses. But those arguments were also shot down by supporters of the legislation.
“I know some of my colleagues are very focused on the Controlled Substances Act and what schedule marijuana is, and I get that,” Stivers said. “That’s just not in the jurisdiction of the Financial Services Committee and what we can help is to take cash out of these businesses.”
The committee approved several amendments during the markup of the bill.
One was introduced by Perlmutter, which would require the Government Accountability Office to report to Congress on the availability of financial services to minority- and female-owned marijuana businesses. An amendment by Rep. Katie Porter, D-Calif., clarified that credit unions and de novo banks would get the same safe harbor as banks under the legislation. And the committee also approved Stivers’ amendment providing a safe harbor for insurers serving legal marijuana businesses.
While the committee’s approval of the marijuana banking bill likely means that the full House will pass the legislation, the Senate still remains a hurdle.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, told American Banker that he hasn’t made any decisions on whether to hold a hearing on legislation to enable banks to service cannabis businesses in states that legalized the substance.
And Sen. Sherrod Brown, D-Ohio, the top Democrat on the Senate Banking Committee, said he is not pushing Crapo on the issue.
“Crapo and I have begun to talk about it, but no, I’m not pushing him to do it yet,” Brown said in an interview.