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The Senate Banking Committee has scheduled a Sept. 27 markup for legislation that would provide credit unions and banks with a regulatory safe harbor for providing services to marijuana-related businesses in states where cannabis is legal.
The move is particularly significant since marijuana banking legislation always has gotten hung up in the Senate.
This year, however, the bill (S. 1323) has 42 Senate co-sponsors. It has been supported by both credit union and banking trade groups, and Senate Majority Leader Sen. Charles Schumer, D-N.Y., has indicated he would like the Senate to consider the legislation this year.
The measure has passed the House several times as a standalone bill or as a provision added to larger legislation. But, this year, House Financial Services Chairman Rep. Patrick McHenry, R-N.C., has said the bill is not a high priority for his panel.
Conservative Pushback
As the Senate committee prepares to consider the bill, Alabama conservatives called on Sen. Tommy Tuberville, R-Ala., to oppose the measure.
“The SAFE Banking Act is a backdoor attempt to legalize marijuana and will jeopardize public safety, public health, and the well-being of our children,” the conservatives, including three members of the state legislature, said in a letter to the freshman senator.
They pointed out that Alabama would not benefit from the legislation, since cannabis is not legal in that state.
What Will the Legislation Look Like?
It is not clear what changes may be made to the legislation before the markup.
For instance, in an effort to gain Republican support, cannabis banking legislation often has included a provision that would prohibit a federal agency from requesting that a financial institution terminate a specific customer account or a group of customer accounts.
Republicans have said they want that plan to avoid a repeat of “Operation Choke Point,” an Obama Administration effort that critics say allowed financial institutions to decide not to serve specific industries, such as gun manufacturers.
However, Senate Banking Committee member Sen. Jack Reed, D-R.I., has criticized that provision, contending that it would make it more difficult for federal banking regulators to raise an alarm about a specific customer who might pose a danger to a financial institution.
Where Things Stand Currently
Some financial institutions have chosen to serve marijuana-related businesses even though they do not have a guaranteed safe harbor, according to recently released statistics compiled by the Financial Crimes Enforcement Network.
The data showed that, at the end of the first quarter of 2023, 479 banks, 183 credit unions and 145 non-depository institutions served marijuana-related businesses. At the end of June 2023, 496 banks, 177 credit unions and 139 non-depository institutions were providing services to those businesses.
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