A revised bipartisan marijuana banking bill has officially been filed in the Senate, one week before a key committee is scheduled to vote on the legislation. But its prospects in the GOP-controlled House remain uncertain, with a key committee chairman declining to say whether he’d take up the legislation if it crosses over to his chamber.
The renamed Secure and Fair Enforcement Regulation (SAFER) Banking Act, sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), was introduced on Wednesday—one day after Marijuana Moment first reported on the finalized language.
The amended bill is the product of months of negotiations as senators worked to build bipartisan buy-in and get it in passable form. It’s set to receive a markup in the Senate Banking Committee on September 27. After that point, Senate Majority Leader Chuck Schumer (D-NY) said on Tuesday he intends to “bring it to the floor with all due speed.”
In a joint statement shared with Marijuana Moment on Wednesday, Schumer, Merkley, Daines and Sens. Kyrsten Sinema (I-AZ) and Cynthia Lummis (R-WY) applauded the bill introduction.
“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”
“We look forward to the markup of this bill in the Senate Committee on Banking, Housing and Urban Affairs on September 27th,” they said.
We're introducing the Secure and Fair Enforcement Regulation (SAFER) Banking Act.
This will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions. pic.twitter.com/7SEiJEu9nV
— Chuck Schumer (@SenSchumer) September 20, 2023
The majority leader also said in a separate statement on Wednesday that he is committing to attaching legislation on incentivizing state-level cannabis expungements and restoring gun rights for medical marijuana patients.
Specifically, he said he would move to add the Harnessing Opportunities by Pursuing Expungement (HOPE) Act and Gun Rights and Marijuana (GRAM) Act to the final legislation.
“I’ve long advocated for expungement of records for cannabis offenses, and with SAFER Banking moving through the committee in such a strong, bipartisan way, I believe now is the time to get it done,” Schumer said. “I look forward to seeing the bill pass out of committee, so we can vote on it on the Senate floor.”
Other initial cosponsors on the bill include Sens. Kevin Cramer (R-ND), Cory Booker (D-NJ), Dan Sullivan (R-AK) and Bob Menendez (D-NJ).
Booker’s cosponsorship is especially notable given that the senator has previously resisted taking the incremental financial-focused reform step before advancing comprehensive legalization that helps right the wrongs of the war on drugs. When an earlier version was being considered in 2021, he vowed to “lay myself down” to block the cannabis banking legislation until Congress acted on ending prohibition.
The senator said in a statement on Wednesday that he’s cosponsoring the bill with the “assurance of Majority Leader Schumer that the HOPE Act, which will support states with grants so they can seek to expunge cannabis records, will be incorporated into this legislation on the Senate floor.”
We just introduced the bipartisan SAFER Banking Act. We have the momentum to finally pass a bill that makes sure all legal cannabis businesses can access the standard financial services they need to keep their employees, businesses and communities safe. https://t.co/noq2wLc7rc
— Senator Jeff Merkley (@SenJeffMerkley) September 20, 2023
The newly released bill reveals the types of compromises senators made over recent weeks. Most of the new provisions are described under Section 10—a component of the reform that Republicans have strongly favored and certain Democrats opposed over concerns it could undermine broader banking regulations.
Here are some of the key changes from the previous Secure and Fair Enforcement (SAFE) Banking Act:
- In Section 7, the SAFER Banking Act omits earlier language preventing federal regulators from taking action that “discourages” financial institutions from working with state-legal marijuana businesses.
- However, Section 10 of the bill now spells out how regulators must broadly have a “valid” reason for requesting or requiring the termination of bank accounts for any business.
- It was revised to give the Federal Deposit Insurance Corporation (FDIC) one year, rather than 180 days, to develop guidance for financial institutions serving state-licensed marijuana businesses.
- The original bill said that income derived from state-legal cannabis business activity couldn’t be used to deny “federally backed mortgages.” That’s been revised to say that standard applies to a “covered” mortgage. A new example of such a covered mortgage is one that’s “acquired or purchased by a Federal Home Loan Bank or pledged as collateral for an advance from a Federal Home Loan Bank.”
- Section 10 has been expanded, for example to include a “sense of Congress” language stipulating that the personal and political beliefs of financial regulators should not influence their decisionmaking.
- The legislation would newly require federal banking regulators to work with state banking supervisors and the secretaries of commerce and treasury and, within two years of enactment, form rules or guidance to increase access to deposit accounts for businesses and customers and to enable banks and credit unions to more effectively maintain customer relationships—especially for those in rural, low-and moderate-income areas, Tribal communities and unbanked businesses and consumers.
- There’s a new requirement for the Federal Deposit Insurance Corporation (FDIC) to conduct a biennial survey and report to identify barriers to accessing deposit accounts for small-and medium-sized businesses.
- Further, the bill has been revised to include explicit mention of tribal communities in Section 11, which requires federal regulators to submit a report to Congress on access to banking for historically underbanked communities. Tribes are now listed beside minorities, veterans, women and small state-sanctioned cannabis businesses as subjects of that report—which is not the case in the Secure and Fair Enforcement (SAFE) Banking Act as introduced.
- While required reports on data concerning small and minority-, veteran- and women-owned businesses are still in the bill, the phrase “diversity and inclusion” has been removed from the relevant section titles.
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All told, it appears that the proposed revisions could satisfy both sides of the aisle, with Section 10 kept “intact,” as Banking Committee member Sen. Kevin Cramer (R-ND) said this week, but also with new provisions to promote equity in the financial system.
Sen. Jack Reed (D-RI), who also serves on the Banking Committee and previously raised concerns about Section 10, has also said that senators “talked extensively” about the language, “and we’ve made some progress.”
“I think we’ve resolved most of the issues we had—and I hope we have so we can get it out of the committee with a strong vote,” he said.
But, again, the House under Republican control is another matter. Rep. Patrick McHenry (R-NC), who chairs the House Financial Services Committee where the cannabis banking bill would likely be referred, isn’t supportive of the reform—and he gave a noncommittal response to Punchbowl News about how he’d approach the bill if it ends up in his panel’s jurisdiction.
He said simply that he “look forward to seeing their markup,” adding that he’s “happy to talk” with Senate leaders about the legislation, but he also has “policy I’ve originated too.”
“They should be interested in talking to me about that as well,” he said. “After the end of this week, we’ll have five major packages out of committee. Happy to talk about all of them.”
Meanwhile, Schumer and others have also discussed plans to amend the legislation on the floor to adopt “critical” criminal justice provisions such as expungements for prior marijuana convictions, calling broader effort to repair the harms of the drug war a “moral responsibility” for Congress.
A spokesperson Daines told Marijuana Moment in July that he is “open” to including the additional reform provision, even as he’s cautioned Democrats against significantly expanding the bill’s scope in a way that could jeopardize GOP support. As a standalone in its current form, insiders say the measure has enough Republican buy-in to reach the 60-vote threshold needed for passage in the Senate.
On Tuesday, a coalition of 35 cannabis trade associations, drug policy reform groups and a top national labor union called on Congress to help address the “humanitarian toll” of robberies targeting cash-intensive marijuana businesses by passing the SAFE Banking Act “this year.”
The American Trade Association for Cannabis and Hemp (ATACH)—along with trade groups representing marijuana businesses in 16 states plus Washington, D.C.—also sent a letter to Brown and Banking Committee Ranking Member Tim Scott (R-SC) in July, imploring them to pass the cannabis banking bill “without further delay.”
Also, the American Bankers Association (ABA) also renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.
July also marked the 10-year anniversary since the introduction of the first version of what is now known as the SAFE Banking Act.
Colorado Gov. Jared Polis (D) separately said in a recent letter to President Joe Biden that he should throw his support behind the congressional push for marijuana banking reform as the Drug Enforcement Administration (DEA) begins its review of cannabis scheduling after receiving a rescheduling recommendation from the top federal health agency.
Photo courtesy of Mike Latimer.