Billionaire philanthropist and former hedge fund manager Tom Steyer, a 2020 Democratic presidential candidate, said last week that federal marijuana prohibition prevents him from financing cannabis businesses though a social justice-focused community bank he founded.
In one of the candidate’s first public comments on marijuana, Steyer told The Las Vegas Sun that he supports legalization and said the banking issue must be resolved so that financial institutions don’t lose federal insurance coverage if they service state-legal cannabis companies.
“As long as there is federal deposit insurance and it is illegal according to federal law to sell either medical or recreational marijuana, it’s impossible for a bank to finance marijuana businesses and get federal deposit insurance,” he said. “I know that because my wife and I started a community bank that is dedicated to the idea of economic justice, environmental sustainability [and] women- and minority-owned businesses.”
“We know that for us to actually finance marijuana businesses would mean that we would lose the support of the Federal Deposit Insurance Corporation (FDIC). So, the real question is, don’t we have to change the federal laws so that the FDIC can allow community banks and other banks to support these legal industries in the states where they exist?”
“I’m for legalizing marijuana. I’m from California, we also have legalized marijuana.”
While advocates continue to push for comprehensive legalization legislation, fixing the banking problem for marijuana businesses has garnered particular bipartisan support this Congress.
A bill to protect banks that service the cannabis industry was approved by the House Financial Services Committee in March. More recently, the legislation was also discussed during a Senate Banking Committee meeting.
Chairman Mike Crapo (I-ID), who earlier this year indicated he wouldn’t hold a hearing on the issue as long as marijuana is federally illegal, took some by surprise by scheduling the session. He’s since said that we need to “move forward and see if there’s some way we can draft legislation that will deal with the issue.”
The majority of Democratic presidential hopefuls have voiced support for legalization, placing an emphasis on the need to include social equity provisions that empower communities disproportionately impacted by prohibition to participate in the legal industry.
Steyer seemed to suggest that he’s considered contributing to that end through his community bank, the Beneficial State Bank, which provides credit and loans “to constructive businesses and nonprofits” in “underserved” communities throughout California.