The Republican chair of the Senate Banking Committee said on Thursday that his panel will hold a vote on legislation allowing banks to service state-legal marijuana businesses this year.
Chairman Mike Crapo (R-ID) told Politico that while he doesn’t support ending federal cannabis prohibition, his committee will take up the industry’s banking issues, which was the subject of a hearing the panel held in July. Because marijuana remains federally illegal, many financial institutions remain wary of taking on cannabis business clients—forcing them to operate on a cash-only basis—and there’s a growing bipartisan call to resolve the problem.
Crapo doesn’t support cannabis legalization. But he says he’s been compelled to act bc cannabis businesses w/o bank access are forced to transact in cash and there are issues surrounding transactions with businesses like plumbers, hardware stores, etc that serve the industry
— Zachary Warmbrodt (@Zachary) September 12, 2019
“We’re working to try to get a bill ready,” the senator said. “I’m looking to see whether we can thread the needle.”
Legislation to provide financial services to marijuana businesses—the Secure and Fair Enforcement (SAFE) Banking Act—already exists and was approved by the House Financial Services Committee in March. That bill has 206 cosponsors, including 26 Republicans. The companion Senate bill has nearly a third of the chamber signed on.
It’s not clear what changes Crapo is hoping for, but there’s been talk of adding hemp-specific banking protections, or including language to prevent activities such as Operation Choke Point, an Obama-era policy that conservatives view as biased against certain industries such as gun manufacturers, in order to bolster the proposal’s GOP appeal.
This development comes as Congress returns from a summer recess. Cannabis reform advocates hoped that the Democratic-controlled House would put the SAFE Act to a vote before August, but that window passed.
There have been renewed rumors that House leadership is planning to schedule a vote on the SAFE Act soon, but some dispute has broken out among cannabis reform supporters about the notion of passing a bill seen as industry-focused prior to moving broader legislation to deschedule marijuana and repair the harms of past prohibition enforcement.
Many supporters of more far-reaching moves have zeroed in on a bill House Judiciary Committee Chairman Jerrold Nadler (D-NY) filed, but it’s unclear when that legislation would be able to see a markup by the panel, which for now is focused on issues such as gun reform and the prospect of impeachment proceedings.
If the Republican-controlled Senate were to pass marijuana banking legislation soon, it could increase political pressure on House majority Democrats to follow suit lest they be seen as lagging on an issue on which their party has increasingly sought to lead.
Don Murphy, federal policies director for the Marijuana Policy Project, told Marijuana Moment that polling in Crapo’s home state of Idaho—one of only three states that currently have no legal cannabis laws on the books—shows that voters in the state support cannabis reform and that “it appears Chairman Crapo is seeing similar results.”
“Apparently MPP hasn’t done the only marijuana poll in Idaho recently,” he said. “Idaho voters support marijuana policy reform and with his support of the SAFE Act the Senator is moving in their direction. What took years to develop could end up in a photo finish as each chamber attempts to beat the other to a floor vote. If true, this is a very good news.”
Idaho activists are working to place a medical cannabis measure on the state’s 2020 ballot.
While it’s not clear Crapo that endorses the SAFE Act as written or that he would use an amended version of the existing bill as the vehicle to advance the issue, he’s made several statements indicating that he’s interested in a legislative fix on cannabis banking.
“We may craft our own bill or we may work with them to craft any amended legislation,” he told Politico.
“It would be terrific for the Senate Banking Committee to hold a markup on The Safe Banking Act, which we believe would result in a favorable bipartisan vote,” NORML Political Director Justin Strekal told Marijuana Moment. “Now more than ever, members of Congress spanning all types of geographic and political diversity recognize the need to amend existing law and move us towards ending federal prohibition.”
Crapo told Politico that he’s particularly interested in passing cannabis banking reform legislation because of the negative impact of the ban on ancillary businesses like plumbing and hardware companies that work with such businesses but don’t deal directly with marijuana.
The head of the American Bankers Association (ABA) predicted last week that the House would vote on the legislation before October.
THIS is a very important development- thank you @MikeCrapo for helping advance this legislation that will allow people and businesses access to the banking sector in states that have legalized cannabis and address the state/federal law inconsistency https://t.co/GzHo5cXuxA
— Rob Nichols (@BankersPrez) September 12, 2019
“THIS is a very important development- thank you [Sen. Crapo] for helping advance this legislation that will allow people and businesses access to the banking sector in states that have legalized cannabis and address the state/federal law inconsistency,” he wrote in response to the senator’s latest comments.
Politically, passing the banking bill in the Senate could give Sen. Cory Gardner (R-CO), its chief GOP cosponsor, a much-needed win heading toward next year’s election. Democratic candidates, including former Colorado Gov. John Hickenlooper (D) are targeting the seat, and Gardner has made much of his work to support the state’s legal cannabis market.