The GOP Senate sponsor of a bill to protect banks that work with state-legal marijuana businesses released an ad on Monday that features the CEO of the Montana Bankers Association explaining what he sees as the benefits of the incremental reform legislation.
Sen. Steve Daines (R-MT) is pushing for the enactment of the Secure and Fair Enforcement (SAFE) Banking Act, which has passed the House in some form six times at this point. His chamber has represented a significant obstacle, however, and so the senator is showcasing how top officials in the financial sector are saying the reform is needed.
“Banks are really the lifeblood of virtually every community in Montana,” Cary Hegreberg, CEO of the Montana Bankers Association, said in the ad. “It’s going to be very difficult, unless the SAFE Banking Act passes, for marijuana-related businesses to actually set up accounts and do financial transactions in the way most of us do.”
He added that the banking industry in his state “does not condone the marijuana law” that legalized cannabis in his state through voter approval at the ballot in 2020. “The fact of the matter is we formally opposed the ballot measure.”
Voters, however, didn’t side with the financial sector or prohibitionists who campaigned against the reform, and now there are legal adult-use cannabis businesses in the state that are looking for financial services.
“Our banks, they want to do the right thing in their communities. They want to serve the businesses that are there. It’s a legal business,” Hegreberg said. “The SAFE Banking Act, which Senator Daines is sponsoring, would go a long way toward helping banks understand what the rules are. We’re very grateful to Senator Daines for his efforts to help clarify what financial institutions, notably banks, can and can’t do as it relates to cannabis.”
Daines, for his part, said in a press release that “Montana businesses shouldn’t be forced to operate in all cash, and Montana banks, credit unions and financial institutions need certainty that they won’t be punished for serving legal businesses.”
“My bipartisan bill will improve public safety and support jobs, tax revenue and local economies. We have the opportunity to pass it, so let’s get it done,” he said.
My bipartisan SAFE Banking Act is about increasing public safety.
We need to pass it. pic.twitter.com/IBlsH85Frw
— Steve Daines (@SteveDaines) June 6, 2022
Last year, Daines’s office released a similar ad featuring a local sheriff expressing support for his cannabis banking bill.
Meanwhile, an organization representing mayors from across the U.S. adopted a resolution on Monday imploring Congress to pass a bill to safeguard banks that work with state-legal marijuana businesses from federal penalties.
Separately, a coalition of marijuana advocacy groups recently launched a campaign meant to promote education about the need for the incremental reform, highlighting what they see as the social and economic equity advantages of freeing up businesses in the industry to access traditional financial services.
The vehicle that most stakeholders and advocates are closely paying attention to as a possible means of enacting the SAFE Banking Act is the manufacturing bill in conference called the America COMPETES Act.
The conference committee held its first meeting on that bill last month, with multiple appointed conferees urging the body to attach the SAFE Banking Act language in the interest of economic competitiveness and public safety.
But while the SAFE Banking Act has passed the House in some form six times as this point, a key barrier is Senate leadership, which is working to finalize a bill to comprehensively end federal prohibition. A top aide for Senate Majority Leader Chuck Schumer (D-NY) recently tempered expectations about the prospects of moving marijuana banking through the America COMPETES Act.
For his part, Rep. Earl Blumenauer (D-OR), an appointed conferee on the manufacturing bill, separately said that he feels there “tremendous momentum” to get the marijuana banking job done through their negotiations.
Asked by Marijuana Moment whether there are any specific, equity-centered policies that he’s discussed adding to the SAFE Banking Act with Senate leadership, Blumenauer said that he’d “prefer not to go into” discussions he may have had with Senate colleagues, and he put the onus on the opposite chamber to propose any specific changes that would make the legislation more palatable to them.
“They have the opportunity to move something forward, and I welcome those efforts,” he said. “I’m perfectly willing to work with them as far as they can go as long as it doesn’t get in the way of solving this.”
The standalone Senate version of the SAFE Banking Act currently has 42 cosponsors, including nine Republicans.
That reluctance on the Senate side was also the subject of a letter that SAFE Banking Act sponsor Rep. Ed Perlmutter (D-CO) sent to leadership last month.
In a previous statement to Marijuana Moment, Perlmutter pointed out that “more than two-thirds of the conferees have already voted for or cosponsored the SAFE Banking Act.”
The congressman has even made a point to talk about enacting the reform legislation during committee hearings on ostensibly unrelated or wider-ranging legislation, like at a recent House Rules Committee hearing.
Despite recently saying that he’s “confident” that the Senate will take up his bill this session, Perlmutter recognized that while he’s supportive of revisions related to criminal justice reform, taxation, research and other issues, he knows that “as we expand this thing, then we start losing votes, particularly Republican votes and we got enough votes in the Senate to do it” as is.
Rep. Maxine Waters (D-CA), who chairs the House Financial Services Committee and previously listed marijuana banking as a legislative priority ahead of the conference, said that the bipartisan nature of the reform proposal is “evident” based on the fact that the House included it in the chamber’s version of the manufacturing bill before it was removed in the Senate.
Additionally, nearly a quarter of all senators sent a bipartisan letter this month urging that cannabis banking be included in the final bill.
The third-highest-ranking Democratic member in the Senate, Sen. Patty Murray (D-WA), has taken special interest in marijuana banking reform, describing it as a priority of hers as an appointed member on the bicameral conference committee.
Meanwhile, an organization that represents state financial regulators from across the U.S., the Conference of State Bank Supervisors (CSBS), is separately putting pressure on Congress to pass marijuana banking reform.
Banking associations representing all 50 states and one U.S. territory also sent a letter to Senate leaders in April that made similar points about the importance of enacting the SAFE Banking Act.
Last month, a coalition of cannabis regulators representing 40 U.S. states and territories separately explained to Congress what the current lack of access to traditional financial services means—not just for the businesses and the programs they oversee, but for the regulators navigating this federal-state conflict themselves.
The non-partisan Cannabis Regulators Association (CANNRA), which doesn’t take a stand on legalization itself, sent a letter to congressional leaders, outlining areas of concern for their states’ respective marijuana markets under the status quo of federal prohibition.
But not everyone is accepting the idea that SAFE Banking alone will provide the relief and resources to disadvantaged communities that proponents are arguing it will.
Cannabis Regulators of Color Coalition has also weighed in on the cannabis banking conundrum, arguing in a Marijuana Moment op-ed that the SAFE Banking Act is insufficient. The group says advocates should push to add provisions to the bill providing interim safeguards for Community Financial Depository Institutions (CFDIs) and Minority Depository Institutions (MDIs), as well as measures to prevent predatory lending and promote loan availability for people from disadvantaged communities.
Meanwhile, the governor, attorney general and other top officials in Washington State sent a letter to congressional leaders last month, again emphasizing the urgent need to pass marijuana banking reform as a public safety imperative.
The number of banks that report working with marijuana businesses ticked up again near the end of 2021, according to recently released federal data.
It’s not clear if the increase is related to congressional moves to pass a bipartisan cannabis banking reform bill, but the figures from the Financial Crimes Enforcement Network (FinCEN) signal that financial institutions continue to feel more comfortable servicing businesses in state-legal markets.
Some Republicans are scratching their heads about how Democrats have so far failed to pass the modest banking reform with majorities in both chambers and control of the White House, too. For example, Rep. Rand Paul (R-KY) criticized his Democratic colleagues over the issue in December.