A major congressional financial committee is scheduled to vote on a series of bills this week, and that includes bipartisan legislation that would protect banks from being penalized by federal regulators for working with marijuana businesses.
The bill, introduced by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA), and cosponsored by more than a third of the entire House, is seen by legalization advocates as the first of several pieces of cannabis legislation that the Democratic-controlled House will take up as the debate over broader marijuana reform continues on Capitol Hill.
The Secure And Fair Enforcement (SAFE) Banking Act is meant to give banks reassurance that servicing cannabis businesses will not result in federal prosecution under existing money laundering or drug laws. While more financial institutions are accepting marijuana business accounts, others refuse to out of concern about the prospect of being punished, which leaves some businesses to operate on a cash-only basis that can make them targets of crime.
Watch the House Financial Services Committee vote on amendments and passage of the marijuana banking bill below:
Watch the committee debate and vote on amendments to the marijuana banking bill during its Wednesday meeting below:
On Wednesday, the panel processed a number of amendments to the legislation via voice votes, with roll call votes and action on final passage expected Thursday morning.
Amendments adopted by the committee included one extending protections to “de novo” banking institutions seeking charters or master accounts from a Federal Reserve bank. Another successful measure expands the provisions to cover insurance companies. A third requires the Government Accountability Office to study previous reports that banks are required to file on their marijuana business customers to understand how effective they are in identifying bad actors.
Among amendments defeated by voice votes are ones that would limit the bill to cover only hemp businesses and revoke protections from banks that serve marijuana operations located close to schools. Others sought to delay enactment of the bill until cannabis is federally descheduled, until federal financial regulators are able to issue new guidance to banks or until the Treasury secretary certifies the legislation wouldn’t leave any financial institution more susceptible to illicit financial activity and money laundering.
The banking bill “addresses an urgent public safety concern for legitimate businesses that currently have no recourse but to operate with just cash,” Chairwoman Maxine Waters (D-CA) said at the start of the committee meeting on Tuesday. “However, I also consider this bill as part of a holistic approach toward providing criminal justice reform to those who have been harmed by criminalization of marijuana and should not by any means be the only bill the House takes up on the important issue of cannabis reform.”
Members of the committee also discussed the bill during portions of their Tuesday meeting:
Last week, Republicans on the Financial Services Committee had requested that Waters delay the vote on the banking bill, writing in a letter that they had several “unanswered questions” about the measure.
“Some on my side support the measure as written. Many oppose it,” Rep. Patrick McHenry (R-NC), the panel’s top Republican, said at the meeting. “Most important for this committee, we need to ensure that we’re doing our due diligence before proceeding. One committee hearing is not enough to fully understand the consequences of this bill. It is a massive change in federal policy.”
Currently, the bill has 152 cosponsors, including 12 Republicans. That’s the most support that a standalone piece of marijuana legislation has ever received in Congress.
The committee held a hearing last month to discuss banking issues in the cannabis industry and the SAFE Banking Act specifically. There, lawmakers heard testimony about the need to change existing laws in the interest of transparency and public safety.
Since then, Perlmutter has floated an amendment, which he’s expected to introduce when the bill comes before the committee, that would require the government to study and issue recommendations about diversity in the cannabis market and expanding banking access for minority-owned and women-owned businesses, among other changes.