Committee votes in Congress often come and go with little notice, but the Senate Banking Committee’s vote on a cannabis banking bill Wednesday was watched across the country. On Wednesday, the Committee voted 14-9 to pass the Secure and Fair Enforcement Regulation (SAFER) Banking Act. While versions of the bill cleared the House seven times,
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Committee votes in Congress often come and go with little notice, but the Senate Banking Committee’s vote on a cannabis banking bill Wednesday was watched across the country.
On Wednesday, the Committee voted 14-9 to pass the Secure and Fair Enforcement Regulation (SAFER) Banking Act. While versions of the bill cleared the House seven times, the bill never reached the Senate.
“Cannabis banking is just one part of the necessary conversation about marijuana policy. There’s still much work that needs to be done to acknowledge, to mend the damage done by the war on drugs,” Sen. Sherrod Brown, chair of the Senate Banking Committee, said at the start of the hearing on Wednesday.
Indeed, while the legislation, at its core, aims to expand the cannabis industry’s access to financial services, the conversation around the bill repeatedly returns to its place in the broader push for cannabis law reform.
The narrow focus of the bill, which has received more intense attention and lobbying than any other cannabis legislation, has both helped and hurt its chances of clearing Congress. On one hand, it has the support of Republicans who otherwise oppose broader reforms, and on the other, it is opposed by Democrats who say it doesn’t do enough.
“I want to start by saying that I am opposed to the legalization or decriminalization of marijuana, but the SAFER Banking Act is not about that. It’s not about that at all. It is not a step in that direction. This bill is about public safety, first and foremost,” Sen. Steve Daines said on Wednesday.
On the other side of the aisle, Sen. Raphael Warnock said that he was “deeply troubled” by the debate about the bill at this moment in time, especially because it doesn’t address restorative justice.
“This bill, I would argue, will make things worse. It will set the terms for a step backwards, backwards in the pursuit of equity and justice and safety. We know what will happen in the cannabis industry if this bill passes,” Warnock said. “I don’t believe in trickle down economics and I don’t believe in trickle down justice.”
The bill now heads to the full Senate, where Sen. Majority Leader Chuck Schumer has said he is “committed” to adding language intended to appease both Democrats and Republicans: the Harnessing Opportunities by Pursuing Expungement (HOPE) Act, which would allocate funding for states pursuing expungements of cannabis offenses, and the Gun Rights And Marijuana (GRAM) Act, which would extend Second Amendment protections to legal cannabis consumers.
However, the fate of the bill remains uncertain, even if it passes in the Senate, where Democrats have a slim majority. Much of the bill’s momentum in the past, for example, has occurred under a Democrat-controlled House. Now, Republicans are in control, and a small, far-right group will be a wild card. Further, all of this is unfolding against the backdrop of a looming government shutdown.
In recent months, there has been considerable debate about Section 10 of the bill, a section that has proven contentious since a May hearing on the bill’s previous version in the Senate Banking Committee.
The issue, in short, came down to whether language in this section that was intended to protect cannabis businesses from discrimination would unintentionally tie banks’ hands when it came to regulating against bad actors and fraud.
This section in SAFER is now doubled in length. Some Republicans touted the revisions as protecting entities like gun manufacturers from “woke” politics.
“The SAFER Banking Act prohibits federal bank regulators from ordering a bank or credit union to close an account based on reputation risk, which will protect energy companies and gun manufacturers from attacks from the left that threaten their business each day,” Sen. Cynthia Lummis said in a statement ahead of the vote.
But Sen. Mike Crapo agreed with Republican colleagues who say they want stronger language.
“I don’t believe that goes far enough to adequately deal with the issue,” Crapo said. “The problem here is that reputational risk, which is what this has become called in today’s nomenclature, is something that financial regulators should not be able to utilize in order to bank or refuse to provide service to any company in any industry.”
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