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Congressman Slams Senate After Marijuana Banking Excluded From Defense Bill



A new version of a congressional defense bill does not include marijuana banking reform following negotiations between the House and Senate. But the lead sponsor of the cannabis reform didn’t go down without a fight, filing an amendment in committee to attach the marijuana language to the legislation—though he ultimately didn’t insist on a vote.

While the House passed its initial version of the National Defense Authorization Act (NDAA) in September with language to protect banks that work with state-legal cannabis businesses, those provisions were not attached to a new bicameral deal filed on Tuesday.

This latest iteration will now go through both chambers again before potentially being sent to the president’s desk.

Rep. Ed Perlmutter (D-CO), chief sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, didn’t force a vote on the amendment in the House Rules Committee—but its last-minute introduction sparked an impassioned debate within the panel, where multiple members expressed frustration over how Senate leadership has approached the issue.

At Tuesday’s meeting, Rules Committee Chairman Jim McGovern (D-MA) sharply criticized Senate Majority Leader Chuck Schumer (D-NY), who has insisted that broad justice-focused marijuana reform should be addressed before passing something like the SAFE Banking Act.

“I don’t really quite know what the hell his problem is,” McGovernor said, referring to Schumer. “But what he’s doing is he’s making it very difficult for a lot of small businesses—and minority-owned businesses, too—deal with the issue of cannabis to be able to move forward and to expand and to hire more people.”

Rep. Adam Smith (D-WA), chairman of the House Armed Services Committee, who is a lead negotiator on NDAA, also expressed frustration over how Senate leadership has approached the cannabis banking issue.

“The impact of this, as a practical matter, to not have the SAFE Banking Act is incredibly dangerous,” he said, adding that small businesses “basically have to run a cash business” and they “can’t do the normal banking that is available to them in the states where where marijuana is legal.”

“I even seriously considered saying, you know, we’re just gonna put it in and the Senate can deal with it,” Smith said. “But the bottom line is, if the majority leader in the Senate has this opinion—and it’s worth noting that the minority leader has a similar position in the Senate—they don’t want this included, that’s not the way the process works.”

Smith and other lawmakers said that while they support the cannabis legislation, inserting it over the Senate’s objections could doom the overall defense bill, a scenario they weren’t willing to risk.

Perlmutter mused that “precisely why the majority leader, Mr. Schumer, is opposed to this is still pretty much a mystery to me.”

“It makes no sense because of the public safety aspect, the minority business aspect,” he said. “Without the ability to have banking, many small businesses—veteran-owned organizations, women-owned businesses—don’t have access to capital.”

“You have heard my ire and my irritation and my anger because people are getting killed. They’re getting robbed. And we’re making no moves,” he said. “We now have made some advancements, but this thing’s been sitting there for three years.”

Despite his frustration, Perlmutter said it’s not his intention to “start really throwing procedural wrenches into everything” to advance the reform, and so he didn’t push for a vote on the amendment in committee. That said, the congressman said he’s “not raising the white flag on this thing” and “we’re going to keep bringing this up.”

Perlmutter, who announced his plan to file an amendment in the Rules Committee shortly after the next of the negotiated defense bill was released earlier on Tuesday, said that he spoke with House Speaker Nancy Pelosi (D-CA) about pursuing other avenues to force the Senate to finally take up his legislation.

Rep. Jamie Raskin (D-MA) applauded Perlmutter’s leadership on the issue and said “we have to do whatever we can to push it forward.” He added that “we’ve got to find another vehicle to make that [reform] real.”

Smith later added that the process of negotiating with the Senate on cannabis banking through NDAA resulted in “progress on this issue—and the Senate is under a lot more pressure to do something.”

Rep. Dave Joyce (R-OH), who is not on the Rules Committee but who is a co-chair of the Congressional Cannabis Caucus, said it is “incredibly disappointing” that the cannabis language was taken out of NDAA.

“The longer the Senate delays giving state-legal cannabis businesses access to basic banking services that every other legal US business has, the more it endangers public safety, stifles economic equity, and exacerbates the unsustainable patchwork of federal/state cannabis laws,” he said.

Separately, the new defense bill also excludes an NDAA amendment filed by Sens. Dianne Feinstein (D-CA) and Brian Schatz (D-HI) that would have streamlined the application process for researchers who want to investigate cannabis as well as manufacture the plant to be used in studies. It also doesn’t include a separate Schatz-led amendment to federally legalize medical marijuana for military veterans who comply with a state program where they live.

Marijuana Moment is already tracking more than 1,300 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

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Advocates and lawmakers have been split on whether banking should advance through NDAA.

Supporters argue that enacting the reform is necessary for public safety, as many marijuana businesses operate on a largely cash-only basis without access to traditional financial institutions, making them targets of crime.

But some groups like the Drug Policy Alliance (DPA) have urged leadership to hold off on banking reform until comprehensive legalization legislation that promotes social equity is approved.

Voices in favor of advancing marijuana banking through this defense vehicle have been wide ranging.

A coalition of financial associations and labor groups—including the American Bankers Association, Credit Union National Association (CUNA) and United Food and Commercial Workers Union—was the latest to send a letter to Senate leadership urging the inclusion of the SAFE Banking Act in NDAA.

CUNA and other credit union associations sent a letter with a similar request to earlier last month.

Bipartisan members of the Senate Armed Services Committee also recently sent their own letter urging leaders to include the SAFE Banking Act in the final NDAA. Shortly thereafter, U.S. senators representing Colorado made the same request in a separate letter.

Last month, a bipartisan coalition of two dozen governors implored congressional leaders to finally enact marijuana banking reform through the large-scale defense legislation.

A group of small marijuana business owners also recently made the case that the incremental banking policy change could actually help support social equity efforts.

Rodney Hood, a board member of the National Credit Union Administration, wrote in a recent Marijuana Moment op-ed that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications now.

Meanwhile, an official with the Internal Revenue Service (IRS) said that the agency would like to “get paid,” and it’d help if the marijuana industry had access to banks like companies in other legal markets so they could more easily comply with tax laws.

The secretary of the U.S. Treasury Department said last week that freeing up banks to work with state-legal marijuana businesses would “of course” make the IRS’s job of collecting taxes easier.

Federal data shows that many financial institutions remain hesitant to take on cannabis companies as clients, however, which is likely due to the fact that the plant is a strictly controlled substance under federal law.

While Schumer has been adamant in his push to first pass comprehensive reform—like the legalization bill he’s working on alongside Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ)—he did signal that he’s open to enacting banking reform through NDAA if it contained social equity provisions.

On that note, a bipartisan duo filed a bill last week that would incentivize states and local governments to expunge cannabis records in their jurisdictions. And the Republican sponsor of that legislation, Rep. Dave Joyce (R-OH), has been taunting Schumer in the days since to let banking reform be attached to NDAA.

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Kyle Jaeger is Marijuana Moment's Sacramento-based managing editor. His work has also appeared in High Times, VICE and attn.


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