Schumer Says Work Continues On Marijuana Banking Bill As Key Senators Dispute Reason For Delay

July 28, 2023 ·

Senate Majority Leader Chuck Schumer (D-NY) says that work continues to pass a bipartisan marijuana banking bill, and another Democratic senator is urging voters to keep up the pressure as lawmakers head back to their districts for the summer. But despite their optimism, a key committee chairman and the measure’s Republican top sponsor are still stuck in an intractable blame game.

Action on the Secure and Fair Enforcement (SAFE) Banking Act is on hold for at least a month as Congress breaks for the August recess—a disappointment for advocates and stakeholders who had hoped that the bill would advance during the summer session, as Schumer had planned as part of an ambitious legislative agenda. But the majority leader said “we’re working on it,” according to a lobbyist who briefly spoke with him twice on Wednesday.

Don Murphy of the Marijuana Leadership Campaign says that’s the simple response he got from Schumer after asking him in passing about the status of the legislation. Notably, Murphy told Marijuana Moment on Thursday, the leader declined to take an opportunity to pin blame on the GOP side for the delays after being asked what the “holdup” was.

“I’m looking for the silver lining, right?” Murphy said. “When the lead Democrat chooses not to blame Republicans, I take that as movement, as some progress.”

Marijuana Moment reached out to Schumer’s office for comment, but a representative was not immediately available.

Meanwhile, Sen. Jeff Merkley (D-OR) also spoke with Murphy on Thursday, and he gave some words of encouragement to SAFE Banking supporters advocating for the legislation, telling them to “keep it up” and emphasizing that “passing important legislation requires people outside the building continuing to weigh in.”

“I am optimistic that we’re going to work through the details when we come back from the August recess,” he said. “But the [Senate Banking Committee] needs to keep hearing your voices about how important this is so it becomes an issue that cannot be ignored in the press of other businesses.”

The fact that Merkley urged supporters to reach out to the “committee,” rather than their individual senators, seems to be a reflection of a key political obstacle that kept the marijuana bill from advancing during the summer session. That is, the disagreement over next steps between Banking Committee Chairman Sherrod Brown (D-OH) and lead SAFE Banking Act cosponsor Sen. Steve Daines (R-MT).

The two senators have been engaged in a war of words for the past several weeks as frustrations mounted over a lack of a committee markup, with Brown insisting that Daines needs to secure more GOP cosponsors, and Daines arguing that Republicans are already prepared to move the legislation as previously agreed to through the floor.

Brown, who confirmed last week that the bill would not receive a vote this week, told Politico in a story published on Thursday that the GOP senator needed to build a broader Republican coalition around the bill to account for potential Democratic defectors who might pull their support unless one section is either removed or significantly amended.

That part of the bill, Section 10, was flagged by certain Democrats like Sen. Jack Reed (D-RI), who say it would undermine broader banking regulations. But for Republicans, changing it is considered a “non-starter.”

Daines told Politico that Brown’s comments about the need for more GOP cosponsors is “100 percent false.”

“The problem is not in Republican votes,” he said. “We had an agreement, but then they walked it back.”

Daines has also previously cautioned against attempting to expand the measure with social justice reforms that progressives would like to add, though his office has told Marijuana Moment that the senator is “open” to adding expungements language, as proposed by Schumer.

Brown, for his part, also told Politico that he doesn’t believe that his committee’s ranking member, Sen. Tim Scott (R-SC), would ultimately back the bill given the volatility of negotiations.

All told, it appears the Senate is adjourning for the next month without a substantive agreement—but with certain key players still hopeful about its prospects when they return. And supporters got another potentially meaningful sign that the momentum hasn’t entirely faded this week, as Sen. Dianne Feinstein (D-CA), who has historically resisted cannabis reform, signed on to cosponsor the SAFE Banking Act.

That raises the total number of cosponsors on the bill to 42, including eight Republican members.

Meanwhile, the American Trade Association for Cannabis and Hemp (ATACH)—along with trade groups representing marijuana businesses in 16 states plus Washington, D.C.—sent a letter to Brown and Scott last week, imploring them to pass the cannabis banking bill “without further delay.”

In a Dear Colleague letter that was distributed this month, Schumer said that advancing SAFE Banking remains a legislative priority, but he also acknowledged that getting the job done “will not be easy” and require GOP buy-in.

Sen. John Cornyn (R-TX), meanwhile, said that the majority leader’s summer agenda was too ambitious, and he expressed serious doubts that marijuana banking—among a list of other legislative items that Schumer identified in the letter—would advance in the summer session. When it comes to cannabis, he was correct.

Schumer also recently spoke with a cannabis industry leader who approached him at an unrelated event last month, and according to that entrepreneur, the Senate leader is feeling “confident” about the prospects of passing the cannabis banking bill.

Sen. Tommy Tuberville (R-AL), for his part, said last month that he’s a “yes” on the legislation. He just doubts that Democratic leadership will follow through on their pledge to get the job done this year.

As its currently drafted, the measure would protect banks and credit unions, as well as depository institutions, from being penalized by federal regulators for working with state-licensed cannabis businesses.

Others have also floated other changes that they’d like to see incorporated into the cannabis bill such as expanding protections to free up marijuana industry access to all forms of financial services, including representation on major U.S. stock exchanges.

That request has faced some criticism from other advocates who say that would be an inappropriate move to help businesses while efforts to legalize marijuana stall in Congress.

A major cannabis lobbying firm apologized in May after sending a letter to Senate Banking Committee leadership concerning the banking bill that contained “inappropriate” references to investments from China in a “misguided attempt” to push for amendments expanding the legislation.

Sen. Jacky Rosen (D-NV) also recently said that she wanted the SAFE Banking Act to pass with an amendment allowing cannabis businesses to access federal Small Business Administration (SBA) services.

In April, Schumer said that he was “disappointed” that a so-called SAFE Plus package of cannabis reform legislation didn’t advance last year, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.

The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.

Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.

Rep. Earl Blumenauer (D-OR), who is a lead sponsor of the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.

The American Bankers Association (ABA) also recently renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.

This month also marked the 10-year anniversary since the introduction of the first version of what is now known as the SAFE Banking Act. (Full Story)

In categories:Banking Politics
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