As Senate Majority Leader Chuck Schumer (D-NY) renews his commitment to tackling marijuana banking reform this year, the head of the U.S. Treasury Department says that regulators are also exploring options to address the issue.
During a hearing before the Senate Finance Committee on Thursday, Sen. Michael Bennet (D-CO) pressed Treasury Secretary Janet Yellen about the fact that the cannabis industry lacks access to traditional financial services under prohibition.
The senator argued that marijuana as a commodity is more “stable” than cryptocurrency, yet banking regulations have allowed for large investments in the latter that ultimately contributed to the collapse of at least one bank this month.
Yellen replied by saying that, “as you pointed out, in the case of marijuana, it is against federal law, and that’s a barrier, unfortunately, to appropriate banking services for the industry.”
“It’s something the regulators have been looking for solutions to,” she said.
Bipartisan congressional lawmakers are similarly seeking to resolve the cannabis banking issue, and the House has repeatedly passed legislation to protect financial institutions that work with marijuana businesses.
The reform was part of a package of cannabis measures that Senate Majority Leader Chuck Schumer (D-NY) attempted to get the reform enacted last session, but he said that GOP opposition derailed the effort.
He told Punchbowl News in a new interview published on Thursday that, even with a divided Congress, he still plans to push for the modest reform, alongside Sen. Steve Daines (R-MT).
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It’s not clear what regulators at the Treasury will be able to do in the interim, but some feel that the problem could be partly ameliorated with clearer federal guidance.
The Financial Crimes Enforcement Network (FinCEN) under Treasury does have Obama-era guidance for banks still in place on how to navigate the state-federal cannabis conflict, but many remain reluctant to take on marijuana clients out of concerns about possible federal penalties.
Yellen has discussed the marijuana issue with lawmakers on multiple occasions, agreeing that the status quo in untenable.
Last year, she said that it’s “extremely frustrating” that Congress has so far been unable to pass legislation like the Secure and Fair Enforcement (SAFE) Banking Act and that Treasury is “supportive” of the proposal.
“We have talked about it for a very long time, and I agree with you: It’s an important issue—and it’s an extremely frustrating one that we haven’t been able to resolve it,” she said at a House committee hearing.
After last year’s election, Sen. Cory Booker (D-NJ) said that he believed it could take “many years from now” to pass cannabis legislation if Democrats didn’t get the job done during the lame duck session.
Rep. Patrick McHenry (R-NC), chairman of the House Financial Services Committee, said in December that while he still opposes the banking proposal, he wouldn’t stand in its way.
The White House was asked in January where President Joe Biden stands on marijuana banking reform, and Press Secretary Karine Jean-Pierre said that the ball is in Congress’s court, with no current plans for administrative action to resolve the issue.