Key Democratic senators vowed Wednesday to block marijuana banking legislation unless it is enacted as part of a comprehensive federal cannabis legalization measure.
The policy agenda being circulated during the Independent Community Bankers of America’s “2021 Capital Summit” contains major anti-credit union rhetoric, including pushing plans to eliminate the credit union tax exemption, getting credit unions covered by the regulations in the Community Reinvestment Act and insisting that the National Credit Union Administration is failing to properly regulate and oversee the industry. Other than that, their policy objectives are very similar to the Credit Union National Association’s and the National Association of Federally-Insured Credit Unions.
The House passed the SAFE Banking Act, which would provide banks and credit unions with a regulatory safe harbor if they provide financial services to marijuana related businesses in states where cannabis is legal. The bill also stops a possible “Operation Choke Point,” prohibiting financial regulators from requiring an institution to stop doing business with a company solely based on the company’s reputational risk. The fate of the bill in the Senate is not clear.
A bipartisan group of senators on Tuesday introduced legislation that would make it easier for credit unions and banks to provide financial services to marijuana-related businesses.
Sens. Jeff Merkley (D-Ore.) and Steve Daines (R-Mt.) and 27 cosponsors introduced the bill. The same bill was introduced last week in the House.
House supporters of marijuana banking legislation are feeling confident that their bill, named The SAFE Banking Act of 2021, will pass the House (as it did in the last session) and then a version of it, unlike last session, will be considered in the Senate. The bill would provide a safe harbor for credit unions and banks that provide services to cannabis-related businesses in states where marijuana is legal. Currently those businesses are forced to operate on a cash basis.
Republican senators this week introduced legislation that would prohibit large banks and credit unions from refusing to provide banking services to legal businesses. It is an attempt to prevent the Biden Administration from restarting Operation Choke Point, an Obama Administration project that was intended to hold financial institutions accountable for processing known fraudulent transactions. Republicans worry that approach would allow banks to avoid providing services to gun-related businesses and other controversial business ventures.
Cannabis banking legislation just got more complicated since Senate Banking Chairman Sherrod Brown (D-Ohio) says it should be combined with comprehensive criminal sentencing reform, which goes through the Judiciary committees.
In an open letter to the new Congress, Rebeca Romero Rainey, the president/CEO of the Independent Community Bankers of America, outlined the current priorities of community bankers, including a request that Congress re-examine the credit union tax exemption.
Rep. Ed Perlmutter (D-Colo.) will chair the Financial Services Committee’s Consumer Protection and Financial Institutions Subcommittee. He is the lead House sponsor of marijuana banking legislation, advocating for regulatory safe harbor for credit unions and banks so they can safely provide financial services to marijuana-related businesses.
Former National Credit Union Administration board members and credit union lobbyists speculate on the legislative changes that will occur now that the Democrats will control the Senate.