Marijuana Banking Bill Approved By Congressional Committee

Forbes
Forbes Marijuana Banking James Alexander Michie

Tom Sydow PHOTO: TOM SYDOW

Following multiple days of lengthy debate and consideration of several amendments, the House Financial Services Committee voted 45 to 15 to advance the legislation to the full body.

Floor action has not yet been scheduled, but cannabis reform advocates are hopeful that the committee approval of the banking bill is a sign Democrats are ready to move broad marijuana reforms this year.

Indeed, House Rules Committee Chairman James McGovern (D-MA) said in a radio interview on Wednesday that he expects the chamber to vote on legislation to end federal marijuana prohibition within a matter of “weeks.”

“We will guide it to the House floor for a vote, which I think it will pass with an overwhelming vote — Democrats and I think a lot of Republicans as well,” he said. “If we have a strong bipartisan vote that will increase the pressure on the Senate to do something.”

All of the party’s major 2020 presidential candidates now support outright legalization, as do a majority of its voters, according to polls.

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’s proceedings, which began on Tuesday and carried over through a second Wednesday meeting to votes on Thursday morning.

“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,” she said.

While some surveys also show that a smaller majority of GOP voters back ending cannabis prohibition, Republican lawmakers in Congress had blocked marijuana amendments from even being considered over the course of the past several years during their House majority.

Last week, top Republicans on the Financial Services Committee requested that Waters delay the vote on the banking legislation, 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 in his opening remarks at the committee 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.”

That the vote went ahead over GOP objections is a sign that the effective marijuana roadblock on Capitol Hill has been lifted by the chamber’s new Democratic majority.

Under the approved bill, federal banking regulators would not be able to punish financial institutions just because they work with marijuana businesses that are legal under state or local laws, or those of an Indian tribe.

Currently, while a growing number of banks are opening accounts for cannabis businesses as more state policies change, many remain reluctant to do so out of fear of violating federal money laundering or drug laws. As a result, many marijuana growers, processors and sellers are forced to operate on a cash-only basis, which can make them targets for robberies.

The legislation approved by the committee, the Secure And Fair Enforcement (SAFE) Banking Act, currently has 152 cosponsors — more than a third of the entire House, which is far more support than any previous standalone cannabis bill has earned. Twelve Republicans have cosponsored the legislation.

The SAFE Banking Act’s approval by the financial services panel is only the third time in history that a standalone marijuana reform bill has cleared a congressional committee. Last year, other committees voted to advance legislation encouraging the Department of Veterans Affairs to study medical cannabis and to require the Department of Justice to license additional growers of marijuana for research, but those proposals never made it to the House floor for action.

“It is our job to address this and no longer ignore it. I have brought this legislation up for six years,” Rep. Ed Perlmutter (D-CO), the SAFE Banking Act’s lead sponsor, said prior to the vote. “The people of this country sort of took it into their own hands, state by state, to pass initiative for medical marijuana or for cannabis oil or fully legal.”

Committee Acts On Amendments

Prior to voting to advance the bill to the House floor, the committee took action on a number of proposed changes to the legislation.

Perlmutter put forth an amendment to his own bill, which was adopted via a voice vote. In addition to clarifying the definition of the financial services that are covered by the bill and specifying that its provisions would protect Federal Reserve banks, new additions would require the federal government to study diversity and inclusion in the marijuana industry — a key concern of legalization advocates seeking to undo the damage of the war on drugs, which has been waged in a racially disproportionate manner.

The new language would require federal financial regulators to publish annual reports tracking “information and data on the availability of access to financial services for minority-owned and women-owned cannabis-related legitimate businesses” and to issue “regulatory or legislative recommendations for expanding access to financial services” for those populations.

In addition, the amended bill directs that the Government Accountability Office to conduct a study “on the barriers to marketplace entry, including in the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.”

Also during the committee markup, Rep. Katie Porter (D-CA) moved a separate amendment that would extend protections to so-called “de novo” banking institutions that are seeking charters or master accounts from a Federal Reserve bank. It was adopted via a voice vote.

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Source: Tom Angell | Forbes

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