Politics
GOP Congressman Presses Federal Financial Officials On Marijuana Industry’s Banking Access Problems
A GOP congressman is pressing federal financial regulators about the ongoing issues that state-legal marijuana businesses face when trying to access basic banking services under federal prohibition.
At a hearing before the House Financial Services Committee on Tuesday, Rep. Warren Davidson (R-OH) asked Comptroller Jonathan Gould whether banks are “still blocking customers who are engaged in lawful marijuana activities.”
“Because nearly every state, whether you like it or not, has made some form of marijuana lawful in those states, and we haven’t synced up at the federal level,” he said. “So I’d love to catch up on how we’re doing that.”
The congressman had limited time to speak and advised that he’d be submitting a formal question for the record to witnesses addressing the cannabis banking issue in hopes of getting a substantive response after the hearing.
Gould also made a brief reference to marijuana banking earlier in the meeting.
In response to another lawmaker’s unrelated question about fraud issues in the banking industry, he said that “in the four months I’ve been on the job that is certainly an issue, fraud, that has risen to the top of my kind of to-do list.”
“It was not something that I was hearing non-stop five years ago when I last worked at the agency,” he said. “Back then, it was cannabis banking when we met with the community bankers.”
Also testifying at the hearing were officials from the Board of Governors of the Federal Reserve System, National Credit Union Association and Federal Deposit insurance Corporation.
As to Davidson’s question about marijuana industry access to financial services, many banks continue to resist accepting even state-licensed cannabis businesses as clients because of the potential risk of federal enforcement action given that marijuana remains a Schedule I drug under the Controlled Substances Act (CSA). However, some banks and credit unions have taken that gamble, while following Obama-era reporting guidance to mitigate the risk.
The increased willingness of certain financial institutions to work with marijuana businesses is partly connected to the perception that Congress could pass bipartisan legislation protecting those banks from being penalized by federal regulators simply for servicing the industry.
That said, the prospects of advancing something like the Secure and Fair Enforcement Regulation (SAFER) Banking Act in the near future seem doubtful. Multiple key House and Senate lawmakers told Marijuana Moment last month that the issue has taken a back seat to other legislative priorities.
Sen. Bernie Moreno (R-OH), who is expected the carry the marijuana banking measure in his chamber this Congress, previously said that he imagined the bill would come up over the fall. Those comments came before a historically long government shutdown, however, and the bill has not yet been filed in either chamber for the current session.
Sen. Jeff Merkley (D-OR), who has sponsored the legislation in prior sessions, told Marijuana Moment that the banking issue is among those Congress has put “on the back burner,” with Democrats focused on other priorities such as preserving health care subsidies under the Affordable Care Act.
On the House side, Rep. Lou Correa (D-CA) said “it feels like I’ve heard nothing” about the path forward for SAFE Banking, and he feels “by now we should’ve had some buzz on it.”
The House has passed versions of the legislation seven times over recent sessions. It advanced out of committee in the Senate last Congress, but it was not taken up on the floor.
One of the most proactive anti-cannabis lawmakers on Capitol Hill, Rep. Andy Harris (R-MD), told Marijuana Moment that he’s not sure about the status of the banking bill but he remains of the mind that, “if it’s illegal at the federal level, it should be kept out of the banking system.”
“But it’s the will of the chamber. My position hasn’t changed,” he said. “I don’t hear that [the bill is moving], but it’s been tried before. It may succeed this year. I don’t know.”
The comments from the bipartisan and bicameral lawmakers came about a month after bipartisan senators said they remain eager to advance the marijuana banking measure—though there was disagreement about whether a possible decision from President Donald Trump to reschedule cannabis would open the door to passing additional reforms in Congress.
Sen. Steve Daines (R-MT), who’s been the lead GOP sponsor of that banking measure in past sessions, said he’s “not sure absolutely” whether moving marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) would meaningfully affect how his colleagues approach the financial services legislation. He said “many senators hold strong opinions,” and “they keep those opinions separate from SAFE Banking.”
Unlike Daines, Sen. Ron Wyden (D-OR) said rescheduling would send a “huge message” to his colleagues about the need to “finally come up with a modern approach” to marijuana laws.
Moreno, for his part, said he did feel that Trump advancing rescheduling would be an “important domino” to advance the bipartisan cannabis banking legislation.
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Meanwhile, during a House Appropriations Committee markup in September, Rep. Betty McCollum (D-MN) criticized the exclusion of provisions to protect banks that work with state-licensed marijuana and hemp businesses from a key spending bill.
Relatedly, a bipartisan coalition of 32 state and territory attorneys general from across the U.S. recently called on Congress to pass a marijuana banking bill to free up financial services access for licensed cannabis businesses.
In January, the office of Rep. Dave Joyce (R-OH), who is again leading the effort on the House, told Marijuana Moment that he would be filing the cannabis banking legislation this session but that its introduction was “not imminent” as some earlier reports had suggested.
