The sponsor of a bipartisan bill to protect banks that work with state-legal marijuana businesses sent a letter to Senate leadership on Tuesday, imploring the chamber to action on the reform on the one-year anniversary of the House’s latest passage of the measure in standalone form.
Rep. Ed Perlmutter (D-CO) wrote that not only is cannabis banking reform an urgent public safety necessity, but passing his Secure and Fair Enforcement (SAFE) Banking Act could also serve as a legislative “icebreaker” for the type of broader reform that Senate leaders have been working on.
The letter was addressed to the sponsors of a wide-ranging marijuana legalization bill that’s being finalized by Senate Majority Leader Chuck Schumer (D-NY), Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ), as well as Banking Committee Chairman Sherrod Brown (D-OH).
The congressman’s SAFE Banking Act has passed in the House in some form six times at this point—and he’s losing patience with the Senate as he continues to push for the reform measure’s enactment before he retires from Congress at the end of this session.
Part of the reason for inaction in the Senate under Democratic control is that Schumer and certain colleagues have insisted that comprehensive legalization that directly address social equity should pass first. But while the leader previously said that his bill to accomplish that would be introduced this month, that timeline was recently pushed back.
“We all agree on the need to pass comprehensive legislation to reform our outdated, dangerous, and inequitable federal cannabis laws. As you know, cannabis reform legislation is a difficult task,” Perlmutter said in the new letter.
“The SAFE Banking Act solves one piece of the puzzle. There will continue to be a need to make reforms when it comes to social equity, decriminalization, expungement, taxes, research, Veterans, and much more. The SAFE Banking Act is an immediate solution to get cash off our streets and ensure state-legal, legitimate businesses can operate like any other type of business, particularly small and minority-owned cannabis businesses who have been disproportionately impacted by the lack of banking services.”
The congressman also referenced the spike in crime targeting state-legal marijuana businesses, which largely operate on a cash-only basis because financial institutions are generally weary on banking companies that deal with a federally prohibited substance.
“Legalizing and decriminalizing cannabis is the most expedient way to deal with the myriad of issues which have developed due to the misalignment in state and federal cannabis laws,” he said. “However, as the end of the 117th Congress is quickly approaching, we cannot let the political realities of passing comprehensive cannabis reform through the Senate prevent progress for our communities now.”
Perlmutter said that Senate leadership should pass the SAFE Banking Act expediently, either through a large-scale manufacturing bill where its language was attached on the House side or as standalone legislation.
Already, there are signs that the banking bill could be a focal point for America COMPETES negotiators, with the chairwoman of the House Financial Services Committee recently listing the bill as one of her panel’s legislative “priorities” as lawmakers move closer to conference.
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In a statement to Marijuana Moment earlier this month, Perlmutter emphasized that a strong majority of members appointed to the conference committee have already either cosponsored or voted for marijuana banking legislation in the past.
Enacting the bill would be an “important step in creating a safer and more equitable industry, and a first step in breaking the logjam on cannabis reform to pave the way for broader, more comprehensive reforms in the near future,” he wrote in the new letter.
“From banking and tax issues to addressing the War on Drugs, Congress has a responsibility to address these outdated laws and better align them with cannabis laws currently in place in the majority of states across the country,” Perlmutter said. “The SAFE Banking Act can be the icebreaker for these needed reforms as it has been in the House of Representatives.”
“We share the same goals to fully reform federal cannabis laws. We cannot let our fight for comprehensive cannabis reform stall progress this year. This would be to the detriment of thousands of state-legal businesses, their employees, and the safety of our communities.
As you work through the summer to finalize comprehensive cannabis legislation, I ask you and your colleagues to take the first step in reforming our cannabis laws and pass the SAFE Banking Act in the America COMPETES Act or as a standalone bill as soon as possible.”
Separately, in an op-ed for Marijuana Moment that was published last week, Rep. Earl Blumenauer (D-OR) described the banking reform measure as “a huge step” toward public safety and equity in the industry.
While the SAFE Banking Act would help resolve certain financial challenges that state-legal cannabis businesses face under federal prohibition, Perlmutter and state and federal officials have also stressed that this is a public safety issue that demands urgent action.
National Credit Union Administration (NCUA) board member Rodney Hood has made repeated calls for a policy change with respect to the cannabis banking conflict, most recently at an event organized by the Emerging Markets Coalition this month.
He said that while it’s unconventional for regulators so vocally criticize Congress about legislative topics, this problem demands special attention.
Amid a scourge of violent crimes targeting cash-intensive cannabis businesses, certain states are moving to provide state-level protections for financial institutions that service the industry, Hood said. And New York lawmakers are seeking to provide tax breaks for the forthcoming marijuana market.
Additionally, the Pennsylvania Senate approved a bill last week to safeguard banks and insurers against being penalized by state regulators for working with state-legal medical marijuana businesses.
Washington State Treasurer Mike Pellicciotti (D) has also been especially vocal about the need for congressional reform, and he wrote in a recent letter to his colleagues in other states that it’s “just not safe to have this financial volume in cash.”
Pellicciotti made similar remarks at a recent conference of the National Association of State Treasurers (NAST). And Colorado Treasurer Dave Young echoed that sentiment in a recent interview with Marijuana Moment.
Perlmutter, for his part, has even made a point to talk about enacting the reform legislation during committee hearings on ostensibly unrelated or wider-ranging legislation, like at a recent House Rules Committee hearing.
At a recent event hosted by the American Bankers Association (ABA), the congressman said that he will “continue to be a real pest, and persistent in getting this done” before he leaves Congress.
Despite recently saying that he’s “confident” that the Senate will take up his bill this session, the congressman recognized that while he’s supportive of revisions related to criminal justice reform, taxation, research and other issues, he knows that “as we expand this thing, then we start losing votes, particularly Republican votes and we got enough votes in the Senate to do it” as is.
Ahead of last month’s ABA event, the financial group released a poll that it commissioned showing that a strong majority of Americans support freeing up banks to work with marijuana businesses without facing federal penalties.
Meanwhile, the number of banks that report working with marijuana businesses ticked up again near the end of 2021, according to recently released federal data.
It’s not clear if the increase is related to congressional moves to pass a bipartisan cannabis banking reform bill, but the figures from the Financial Crimes Enforcement Network (FinCEN) signal that financial institutions continue to feel more comfortable servicing businesses in state-legal markets.
Some Republicans are scratching their heads about how Democrats have so far failed to pass the modest banking reform with majorities in both chambers and control of the White House, too. For example, Rep. Rand Paul (R-KY) criticized his Democratic colleagues over the issue in December.
Read the text of Perlmutter’s letter to Senate leadership on marijuana banking below: