A cannabis banking bill was revised in several different ways under an amendment adopted by the Senate Banking Committee during Wednesday’s markup, according to text that has not yet been officially posted by the panel but which was obtained by Marijuana Moment.
As the debate started, the committee first approved the amendment from Chairman Sherrod Brown (D-OH), which was described as a mix of technical changes and revisions requested by bipartisan members. It touches on issues related to federal guidance for banks that serve cannabis industry clients, rephrased protections for financial institutions and regulators’ enforcement discretion, among other topics.
Here’s how the committee amended the marijuana banking bill
The Treasury secretary would be given one year, instead of 180 days, to issue updated guidance to financial institutions that work with cannabis businesses that was first released under the Obama administration in 2014. That guidance requires banks, credit unions and depository institutions to submit Suspicious Activity Reports (SARs) if they service the cannabis industry.
The bill was amended with technical changes to language on how marijuana-related transactions should not be considered “proceeds from an unlawful activity.”
A new section was added stipulating that the director of the Financial Crimes Enforcement Network (FinCEN) must testify to Congress about anti-money laundering efforts within a year of the bill being enacted.
Federal home loan banks are now included under a list of financial institutions that would be protected from being penalized by federal regulators simply for working with state-legal cannabis businesses.
Language was also revised that relates to a required federal report on “availability of access to financial services for minority-owned, veteran-owned, women-owned, Tribal community-owned, and small State-sanctioned marijuana businesses.”
Much of the focus of negotiations has been on Section 10 of the Secure and Fair Enforcement Regulation (SAFER) Banking Act, which concerns preventing federal regulators from taking discriminatory enforcement action against any industry—language favored by Republicans.
That section was amended in several respects. One key change that seems responsive to issues raised by Sen. Kevin Cramer (R-ND) would strike a provision that would have given regulators discretion to request or impose penalties for a reason “determined to be valid in the discretion of the agency.”
The section was further revised to include businesses owned by government agents of China and Russia in a list of potential “national security and illicit finance threats” that may warrant suspicion by regulators.
Advocates were encouraged to see that the SAFER Banking Act as introduced last week contained a new subsection that would have required financial institutions to create rules or guidance on increasing access to banking services for rural, low- or middle-income and tribal communities. That language was removed under Brown’s amendment, however.
Next steps for the SAFER Banking Act
Senate Majority Leader Chuck Schumer (D-NY) has pledged to bring the cannabis banking bill to the floor “as quickly as possible,” and he’s committed to attaching legislation to incentivize state and local cannabis expungements and gun rights for marijuana consumers.
It’s become clear, however, that lawmakers intend to seek further revisions when it reaches the floor and potentially crosses over to the House.
For example, Rep. Blaine Luetkemeyer (R-MO) of the House Financial Services Committee where the bill would likely be referred upon Senate passage, told Punchbowl News, that even after being amended, Section 10 still gives “broad discretion” to banking supervisors that could enable politically motivated discrimination.
“In its current state, the SAFER Banking Act will not make it through the House,” he said.
Sen. Chuck Grassley (R-IA), meanwhile, sent a letter to Schumer on Thursday to express concern about the Senate’s “ongoing prioritizing of legislation relaxing marijuana laws” over a separate measure the GOP senator favors to permanently prohibit fentanyl analogues.
Sen. Tom Cotton (R-AR) is also stirring the pot over the cannabis banking bill, with an inflated interpretation of Schumer’s floor remarks on Thursday about his plans to amend the legislation with “criminal justice provisions.”
While Schumer has so far only discussed amending the bill to include the expungements and gun rights provisions, Cotton said the majority leader wants to add provisions “letting drug traffickers out of prison.”
Additionally, Sens. Pete Ricketts (R-NE), John Cornyn (R-TX), Ted Budd (R-NC) and James Lankford (R-OK) sent a letter to Senate leadership on Tuesday that argued the SAFER Banking Act would result in the cannabis industry producing higher potency products that would be harmful to youth and compromise “the integrity of the United States banking system.”
On the other side of the aisle, Banking Committee member Sen. Raphael Warnock (D-GA) has pushed for provisions meant to bolster the bill’s social equity provisions. After his proposed amendments were rejected during the committee markup, he was the sole Democrat on the panel to vote against the overall legislation.
Meanwhile, a bipartisan coalition of 22 state attorneys general is also calling on Congress to pass the cannabis banking reform. (Full Story)