Financial institutions

Major financial institutions push House to approve defense marijuana banking bill

A coalition of financial associations sent a letter to the House leadership on Wednesday, imploring lawmakers to approve an amendment aimed at protecting banks that work with state legal marijuana businesses under a proposed large-scale defense law.

The letter is from the Americans Bankers Association (ABA), Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), and National Association of Federally-Insured Credit Unions.

Rep. Ed Perlmutter’s (D-CO) Cannabis Bank Amendment to the National Defense Authorization Act (NDAA) was put in order at a House Rules Committee meeting on Wednesday, the member of Congress insisting that the legislation would be an appropriate vehicle for the bipartisan Secure and Fair Enforcement (SAFE) Banking Act.

The panel’s leadership clearly agreed, and now the proposal is set to receive a vote in the House on Wednesday.

“We take no position on the legalization or decriminalization of medical or recreational cannabis at the state or federal level,” the financial organizations wrote in the new letter. “However, financial institutions operating in states where it is legal have businesses and individuals involved in the cannabis market who need access to traditional deposit and lending services, the absence of which creates a important public safety.”

“Additionally, even financial institutions that choose not to fund the cannabis industry risk unknowingly serving cannabis businesses in states where cannabis is legal. Indirect connections are often difficult to identify and avoid because, like any other industry, those who offer cannabis-related services work with sellers and suppliers. Under current law, a financial institution that does business with one of these indirectly affiliated entities could unknowingly violate federal law.

The House has already passed the SAFE Banking Act in one form or another six times along broadly bipartisan lines, but it is still stalled in the Senate under Republican and Democratic leadership. Senate Majority Leader Chuck Schumer (D-NY) is seen as the biggest obstacle to advancing incremental reform because he has insisted on passing full legalization first.

Many stakeholders and advocates had hoped that banking language would be included in the final report of a manufacturing bill called the America COMPETES Act that is currently in bicameral conference, but leaders recently reached an agreement for the exclude during negotiations. That’s why Perlmutter is re-submitting it as an amendment to the NDAA.

The congressman lobbied for SAFE Banking as part of last year’s NDAA, but while the House included the measure in its version of that bill at the time, lawmakers didn’t. been able to reach an agreement with the Senate to adopt it as part of the final package.

“The SAFE Banking Act puts in place the necessary protections to bring revenues from state-sanctioned cannabis businesses into the financial services mainstream,” the financial groups said in the new letter. “Legal cannabis businesses would no longer be required to deal exclusively in cash, which leaves them vulnerable to robbery and puts customers, employees and the public at risk. The SAFE Banking Act will help keep our communities safe.

Perlmutter also said on Tuesday that “there is hope that we can move forward with SAFE Banking as the nucleus of a slightly broader type of effort” outside of the NDAA. He described what is effectively a marijuana omnibus of modest reforms that would be considered in high-level bicameral talks.

Cannabis banking could be a key part of this package, which could also include provisions related to marijuana research for military veterans, cannabis industry access to federal Small Business Administration (SBA) services. ) and urge states to erase past marijuana records, Perlmutter said.

Regarding the NDAA, the congressman said the “same basic principles apply” to his banking amendment as last year, with respect to the public safety aspects of the reform proposal. What’s different about this round, he said, is that his office received a score from the Congressional Budget Office (CBO) that shows the measure “is actually bringing money to the United States.”

It remains to be seen whether the CBO’s opinion will change the political dynamics in the Senate, but Perlmutter’s office confirmed to Marijuana Moment that they received a score that showed the SAFE Banking Act would lead to cost savings of approximately $500,000 over a 10 year period. period (2022-2032). However, a staff member was unable to share the text of the analysis and CBO did not respond to a query before press time.

The marijuana banking legislation is just one of nine drug policy-related proposals the Rules Committee approved for consideration by the House on Tuesday. For example, measures covering medical marijuana recommendations for military veterans and therapeutic benefits of psilocybin for military personnel will receive ground votes.

Lawmakers have attempted to tie drug policy reform to the NDAA in previous sessions, with mixed results. For the current fiscal year 2023 bill, however, there appeared to be even broader bipartisan interest in using the defense bill as a vehicle for cannabis and psychedelics policy.

Read the financial institutions letter on marijuana banks and the NDAA below:

The House will vote this week on these measures against marijuana and psychedelics as part of the defense bill

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