During a Senate hearing on Wednesday, Sen. Raphael Warnock (D-GA) pressed the heads of major financial institutions on their commitments to marijuana banking reform and social equity. Warnock said he’s willing to support removing barriers to cannabis banking, but he wants to ensure the focus on commerce doesn’t obscure the need for justice after decades of criminal prohibition.
“I want to be clear that I am open to SAFER Banking and more regulatory clarity around cannabis,” Warnock told the heads of Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and others, “but my fear is that if we pass this bill right now, then your banks and other powerful voices will be missing in action when it comes time to address the broader harms of the war on drugs.”
Warnock was speaking to the Secure and Fair Enforcement Regulation (SAFER) Banking Act, a congressional bill that’s awaiting debate on the Senate floor. If passed, it would remove legal liability for banks that work with state-legal cannabis businesses, which are still federally illegal and create compliance obstacles for banks. The measure would not, however, change the legal status of cannabis.
In September, Warnock cast the lone Democratic vote in the Senate Banking Committee against the SAFER Banking Act, saying at the time that while the measure would aid banks and cannabis businesses, it “doesn’t do a thing” for the communities most devastated by the war on drugs.
“Who are we making safer since the war on drugs began over 50 years ago? Communities across America have been decimated. They’ve been hollowed out,” Warnock repeated at Wednesday’s hearing in the committee. “The war on drugs has been a war on communities of color.”
“I support SAFER Banking,” he reiterated. “I’m concerned about equity.”
Communities across America have been hollowed out by the War on Drugs & mass incarceration—yet enough hasn't been done to address the impact of these policies.
At yesterday's Banking hearing, I asked Wall Street CEOs if they’ll commit to supporting standards to create equity: pic.twitter.com/Y17Bdrsbg8
— Senator Reverend Raphael Warnock (@SenatorWarnock) December 7, 2023
Bankers at Wednesday’s hearing of the Senate Committee on Banking, Housing and Urban Affairs were largely noncommittal in response to prompting by Warnock around both the SAFER Banking Act itself and related social equity matters.
When Warnock asked the bankers to raise their hands if they supported the SAFER Banking Act, none of the bankers’ hands went up.
After a moment of awkward silence, Bank of America’s Brian Thomas Moynihan chimed in to say that “we all support the intent of” the bill, but that “the problem is it doesn’t fix the problem.”
Likewise, no hands went up when Warnock asked whether the bankers believed that the reform “will reduce the racial wealth gap.”
Warnock called the response “interesting,” noting that the American Bankers Association, of which all the banks in attendance are members, has said the bill would help facilitate broader access to banking services and provide legal and regulatory clarity.
“My question,” the senator said, “is legal and regulatory clarity for whom?”
In an attempt to get the bankers on record, Warnock then asked each individually if they supported increasing equity as lawmakers move forward on banking reform.
“We support the intent,” replied Jamie Dimon, president and CEO of JPMorgan Chase, “but I would have to see the actual words in the actual law.”
“Would you support efforts to be intentional about supporting equity and addressing the awful impact of 40 years of the war on drugs, which in many ways has been a war on Black and brown people?”
“Yes,” Dimon responded, “but before I agree to something, I’d like to see the actual detail, down to the last word.”
Other bankers gave Warnock similar disclaimers, saying that while they support banking reform in concept, they want to have certainty around details of the proposal.
“The details matter,” said Citigroup CEO Jane Fraser. “We’d look at it and work with your office if we had concerns.”
Warnock thanked the bankers but repeated his concern that focusing on reforming financial services for marijuana businesses could ultimately leave vulnerable communities behind.
“There’s nothing in history that suggests to me that if we leave behind these communities that are marginalized as we make banking safer for powerful banks,” Warnock told the witnesses, “that we’re gonna go back and get those folks.”
While most stakeholders support federal banking reform, the SAFER Banking Act has demonstrated that the devil is in the details. While Warnock spoke to his interest in seeing further equity protections, Senate Majority Leader Chuck Schumer (D-NY) has said that bringing the legislation to the Senate floor is a matter of securing more Republican votes.
Schumer said that task is made more difficult by the fact that some lawmakers are afraid that their constituents, “particularly the older ones,” don’t want them to embrace reform despite overall majority voter support.
Regardless of broad support from voters, the majority leader said the cannabis banking legislation that cleared the Senate Banking Committee in September is still being held from the floor as senators work to assembly a firmer bipartisan coalition.
“It’s bipartisan. It has support in the House. We could make it law soon,” Schumer said last month, without giving a specific timeline for floor consideration in his chamber.
That perspective appears to depart from that of the lead GOP sponsor of the SAFER Banking Act, Sen. Steve Daines (R-MT), who has maintained that enough of his Republican colleagues in the Senate are already prepared to advance the bill on the floor.
The key question at this stage, Daines has suggested, is whether the measure has enough support to pass the House. He said last month that senators are working with their House counterparts “to get alignment between both of the chambers.”