The Marijuana Banking Act Is Going Down (To the Floor)

After its introduction on Tuesday, March 26, 2019, the House Financial Services Committee has voted 45-15 to advance the SAFE Banking Act of 2019 to the House floor on a to-be-determined date. Currently, the Safe Banking Act has 152 cosponsors, including 12 Republicans, which is more than one-third of the entire House of Representatives. House Rules Committee Chairman James McGovern (D-MA) is hopeful that the chamber will vote on and pass the legislation within 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. If we have a strong bipartisan vote that will increase the pressure on the Senate to do something.”

Of course, much of the focus was on the “public safety concern for legitimate businesses that currently have no recourse but to operate with just cash,” as Chairwoman Maxine Waters (D-CA) indicated on Tuesday. However, Chairwoman Waters and several other Democratic supporters framed the legislation as “part of a holistic approach toward providing criminal justice reform” that “should not by any means be the only bill the House takes up on the important issue of cannabis reform.” Conversely, Rep. Patrick McHenry (R-NC), the House Financial Services Committee’s top Republican, urged in his opening remarks that the Committee “ensure that we’re doing our due diligence before proceeding” and acknowledge that “it is a massive change in federal policy.” The vote occurred on Thursday morning following two days of proceedings and over GOP objections.

Several amendments were proposed, considered, and even passed during the Committee markup. The following were most notable:

• Additions requiring the federal government to study diversity and inclusion in the marijuana industry: this would require federal regulators to conduct studies and provide annual reports “tracking information and data on the availability of access ot financial services for minority-owned and women-owned cannabis-related legitimate businesses” (Rep. Ed Perlmutter (D-CO));
• Additions requiring the Government Accountability Office to study banks’ previous reports on their marijuana business customers to understand how effective they are in identifying bad actors, passed via voice vote (Rep. Scott Tipton (R-CO));
• Extension of protections to “de novo” banking institutions that seek charters or master accounts from a Federal Reserve bank, passed via voice vote (Rep. Katie Porter (D-CA));
• Expansion of protections to insurance companies, passed via voice vote (Rep. Steve Stivers (R-OH));
• Delay of the bill’s effective date until marijuana is federally descheduled, withdrawn (Rep. Bill Huizenga (R-MI));
• Delay of the bill’s enactment until federal regulators are able to issue guidance to banks, defeated via voice vote and roll call vote 35-25 (Rep. Bill Huizenga (R-MI));
• Limitation of the bill to only protect hemp businesses, defeated via voice vote and roll call vote 42-18 (Rep. Andy Barr (R-KY));
• Withdrawal of protections from banks that serve marijuana businesses located within 1,000 feet of schools, youth centers, public parks, child care facilities, public housing, civic centers or designated drug-free zones, defeated via voice vote and roll call vote 34-26 (Rep. Sean Duffy (R-WI)).

It is expected that Senators Jeff Merkley (D-OR) and Cory Gardner (R-CO) will file companion legislation to the SAFE Banking Act in the Senate soon. The former iteration gained 20 cosponsors in the chamber but did not receive a hearing or vote. Only time will tell if cannabis banking will get a vote in the Senate, but the pressure continues to build. If nothing else, the passage of cannabis banking legislation by the House would be a truly historic marker in the march to end prohibition.