Republican lawmakers are hopeful of getting a cannabis banking bill through Congress this year. They argue that the existing barriers for financial services in the marijuana industry constitute a “second level” of prohibition.
At a House Financial Services Committee meeting on Thursday, Rep. Warren Davidson(R-OH), raised the marijuana banking issue. Members also discussed broader issues regarding allegations of discriminatory practices in financial institutions.
Congressman: “Sadly, that’s happening elsewhere.” “In nearly every state in the country, some form of marijuana is legal, but you see kind of a second tier of back door making it illegal by saying, ‘Oh, you’re not going to bank those people, are you?'”
“So people—whether they’re investors, employees or anything else in a lawful sector—are being debanked,” Davidson said, inquiring with one of the witnesses, Better Markets Director of Banking Policy Shayna Olesiuk, what can be done about the issue.
Olesiuk responded, “I believe that, as I mentioned earlier, we should focus on the risk analysis.” “Regulators need to make sure that the banks are doing a risk analysis of all the risks they’re taking on. And every legal business, customer or individual is entitled to have access to their banking system.”
A congressman said, “We can take that up” and we’ve “done a lot”, using the Secure and Fair Enforcement Banking Act SAFE as an example.
We’re hoping to see something similar at the finish as a direct result of our focus on [debanking]”, he replied.
Cannabis banking issues were raised in several hearings held by Congress last week. This included a Senate Banking Committee session on debanking, where senators from both parties of the aisle discussed the difficulty of obtaining financial services for cannabis businesses.
A GOP member at that hearing suggested the federal cannabis policy should be examined more widely.
The repeated mentions of cannabis businesses at the hearing were all the more notable considering that the panel’s chairman, Sen. Tim Scott (R-SC), emphasized on multiple occasions—before and during the meeting—that the focus should be on de-banking issues for “federally legal” companies.
The Brookings Institution’s Aaron Klein also briefly addressed the cannabis banking issue at the hearing after submitting written testimony where he recommended that the committee “either combine SAFE Banking with broader [suspicious activity reports, or SARs] “Reform or improve SAFE Banking in order to deal with the problem of SARs filed on cannabis businesses licensed by state.”
—
MEDCAN24 has been tracking the hundreds of bills relating to cannabis, psychedelics or drug policies that have passed through state legislatures as well as Congress in this past year. Patreon subscribers who donate at least $25/month have access to the interactive maps and charts as well as our hearing calendar.
Find out more about our marijuana law tracker. To gain access, become a Patreon supporter.
—
Meanwhile, congressional researchers recently released a report detailing the subject of debanking—while making a point to address how the marijuana industry’s financial services access problem “sits at the nexus” of a state-federal policy conflict that complicates the debate.
While the SAFE Banking Act to address the issue is expected to be filed again this session—that introduction is “not imminent” as some recent reports have suggested, a spokesperson for the GOP House sponsor of the last version told MEDCAN24 last month.
The staffer of Rep. Dave Joyce, R-OH said: “While the introduction isn’t imminent, we are hoping to provide a more firm update in the next few weeks.”
With Republicans now in control of the House and Senate—and leadership having historically opposed even modest cannabis legislation, including the banking bill—there are open questions about the prospects of advancing marijuana reform this session.
On the other hand, others are hopeful, especially after Donald Trump’s campaign-tour endorsement.
Separately, the Government Accountability Office (GAO) announced in December that it’s convening focus groups comprised of marijuana businesses to better understand their experiences with access to banking services under federal prohibition.
Cannabis banking is still a problem for the industry, despite the fact that the issue was not resolved under the previous administration.
A Senate source told MEDCAN24 in December that Republican House and Senate leadership “openly and solely blocked” then-Senate Majority Leader Chuck Schumer’s (D-NY) attempt to include the bill in a government funding bill as the session came to a close.
Sens. Elizabeth Warren (D-MA) and Tommy Tuberville (R-AL) had challenged the idea that there was enough GOP support for the SAFER Banking Act to pass on the Senate floor during the lame duck session.
Warren accused certain Republican members of overstating support for the legislation within their caucus, while also taking a hit at Trump for doing “nothing” on cannabis reform during his time in office as he makes a policy pivot ahead of the election by coming out in support of the marijuana banking bill and federal rescheduling.
In an interview with MEDCAN24, Sen. John Hickenlooper said that the lack of Republican support is the biggest obstacle to passing the marijuana banking legislation. And he said if Trump is serious about seeing the reform he recently endorsed enacted, he needs to “bring us some Republican senators.”
Prior to becoming House speaker, Rep. Mike Johnson (R-LA) consistently opposed cannabis reform, including on incremental issues like cannabis banking and making it easier to conduct scientific research on the plant.
Meanwhile, on the one-year anniversary of a Senate committee’s passage of the SAFER Banking Act in September, the Congressional Budget Office (CBO) released an analysis on the economic impact of the reform, including the likely increase in federally insured deposits from cannabis businesses by billions of dollars once banks receive protections for servicing the industry.
Separately, the CEO of the financial giant JPMorgan Chase said recently that the company “probably would” start providing banking services to marijuana businesses if federal law changed to permit it.
A new GOP proposal would prevent tax deductions on marijuana, even after the federal government reschedules.
Side Pocket Images. Photo by Chris Wallis.
MEDCAN24 could not exist without readers’ support. Please consider making a Patreon monthly pledge if you depend on our cannabis journalism for information.
