The sponsor of a marijuana banking bill scheduled for a key committee vote in Congress this week is moving to amend the legislation to add provisions requiring the federal government to track and issue recommendations on how to expand financial services to minority-owned and women-owned cannabis businesses, among other changes.
The bill, the the Secure And Fair Enforcement (SAFE) Banking Act, is slated to be voted on by the House Financial Services Committee on Tuesday afternoon.
In general the proposal seeks to protect banks from being punished by federal regulators for working with marijuana businesses that are legal under state laws—a key goal for the cannabis industry, the lack of which is seen as a major roadblock to certainty, security and growth.
Current policy makes many financial institutions reluctant to work with marijuana growers, processors or sellers out of fear of violating money laundering or drug laws. And that has forced many cannabis businesses to operate on a cash-only basis, which can make them targets for robberies.
The new House Democratic majority has identified moving on the banking issue as the first step in what could be a broad marijuana reform agenda, although top Republicans are seeking to delay the vote from happening at all this week.
Meanwhile, Rep. Ed Perlmutter (D-CO), the bill’s chief sponsor, wants to strike the current bill’s provisions and replace them with a new version—an “amendment in the nature of a substitute,” in Capitol Hill parlance.
Many of its core provisions, and the main thrust of the legislation, which currently has 143 cosponsors—nearly a third of the entire House—remain the same, however.
Chief among the changes are the diversity and inclusion provisions that would require federal financial regulators to issue reports on an annual basis compiling “information and data on the availability of access to financial services for minority-owned and women-owned cannabis-related legitimate businesses” and make “regulatory or legislative recommendations for expanding access to financial services” for those businesses
Separately, the Government Accountability would be directed to “carry out a study on the barriers to market place entry, including in the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.”
Another change would spell out more clearly which activities are covered under the legislation’s protections. The original version referred to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act to define “financial service.”
The amended language, however, specifies that the protections provided in the bill cover armored car services and money transmitting businesses, as well as the “authorizing, processing, clearing, settling, billing, transferring for deposit, transmitting, delivering, instructing to be delivered, reconciling, collecting, or otherwise effectuating or facilitating of payments or funds, where such payments or funds are made or transferred by any means, including by the use of credit cards, debit cards, other payment cards, or other access devices, accounts, original or substitute checks, or electronic funds transfers.”
The substitute additionally makes sure to clarify that protections under the legislation are extended to federal reserve banks and employees of marijuana businesses.
The amendment also deletes a requirement for federal banking regulators to issue guidance and procedures to banks but maintains a related provision directing the Financial Institutions Examination Council to develop the guidance.
“With access to banking services, cannabis businesses would longer need to operate as a cash only business, which could promote public safety and improve the efficiency of collecting taxes and fees from these businesses,” reads a new committee memo on the bill released ahead of Tuesday’s markup.
The legislation was the subject of a lengthy hearing last month.