Cannabis News of Note for the Week:
Politico Pro Cannabis: GOP banking rift threatens cannabis bill (paywalled, full text below)
Politico Pro Cannabis: Sherrod Brown: Cannabis banking bill will draw ‘strong majority’ (paywalled, full text below)
Politico Pro Cannabis: Schumer officially introduces updated cannabis banking bill (paywalled, full text below)
Credit Union National Association: Senators introduce bipartisan cannabis banking legislation (letter in support of SAFER)
Punchbowl News: McHenry keeps his cards close, options open on SAFE banking (newsletter, full text below)
American Banker: Cannabis banking is a reality. So do banks still need the SAFE Banking bill? (paywalled, full text attached)
Cannabis Reports of Note for the Week:
National Hispanic Cannabis Council: 2023 U.S. Hispanic Cannabis Awareness & Perception Study (attached)
Politico Pro Cannabis: GOP banking rift threatens cannabis bill
By Eleanor Mueller and Natalie Fertig
Republican supporters of bipartisan cannabis banking legislation are scrambling to shore up GOP backing after a key House conservative blasted the bill.
At the heart of the conflict is a section of the legislation that would restrict the ability of regulators to force banks to close customer accounts for reasons of reputational risk.
Republicans have sought such a provision for years in exchange for backing the overarching thrust of the bill, which is to help banks serve cannabis businesses in states where the drug is legal.
Ahead of a landmark Banking Committee vote next Wednesday, Senate Republicans agreed to pare back the account closure restrictions amid warnings from Sen. Jack Reed (D-R.I.) that the proposal would impede banking agencies from policing financial crime.
The deal is triggering resistance from Rep. Blaine Luetkemeyer of Missouri, a senior Financial Services Republican. He crafted the earliest iteration of the account closure language when the bill was first gestating in the House several years ago, motivated by concerns about businesses swept up by the Obama-era Operation Choke Point anti-fraud initiative.
“The Senate’s rewrite of the SAFE Banking Act throws out carefully crafted bipartisan work and crams in gross overreach to potentially crush industries not in line with the president’s agenda,” Luetkemeyer said in a statement Thursday.
Luetkemeyer’s opposition means the bill as drafted could be doomed in the GOP-controlled House, where top Republicans have said the provision will make or break its chances of becoming law.
Luetkemeyer said senators should “demand the necessary changes — because as it’s currently written, it is dead on arrival in the House.”
Luetkemeyer’s concern with the bill, he said, is that “unelected regulators could strip away any business’ bank account based on ‘informal guidance,’ which has no legal standing, or for a ‘reason determined to be valid in the discretion of the agency.'”
Sen. Kevin Cramer of North Dakota, a Republican who backs the bill, has requested an amendment after raising similar concerns, and staff for Sens. Steve Daines (R-Mont.) and Cynthia Lummis (R-Wyo.) are also working to smooth things over, according to three sources involved in the talks.
House and Senate GOP staffers plan to meet Thursday to reconcile bill language, said a House Republican aide granted anonymity to discuss negotiations.
Politico Pro Cannabis: Sherrod Brown: Cannabis banking bill will draw ‘strong majority’
By Jasper Goodman
Senate Banking Chair Sherrod Brown said he expects a “strong majority” of his committee to support bipartisan cannabis banking legislation next week, following a deal to revamp a controversial piece of the bill.
“This was a long, arduous process,” the Ohio Democrat told reporters Wednesday. “Most members of the committee are going to vote for it.”
Senate Majority Leader Chuck Schumer (D-N.Y.) said that he intends to bring the bill to the floor with “all due speed.”
How we got here: The bill at issue would help banks serve cannabis businesses in states where the drug is legal. Talks on the legislation hit a snag earlier this summer after Sen. Jack Reed (D-R.I.) raised concerns about a provision — a priority for Republicans — that would limit the extent to which banks can cut ties with certain customers.
Revised text of the legislation, obtained by POLITICO on Tuesday, would still restrict bank regulators from forcing lenders to cut off customers for reasons of reputational risk. But it spells out ways that agencies can still act to deter illegal activity.
“There was no bill coming out of this committee if it weakened the regulators’ ability to protect the public,” Brown said in a separate interview Wednesday. “This committee has a history of being a Wall Street committee … and those days are over.”
Senate and House Republicans react: The bill is expected to garner support from at least a handful of Republicans, but some remain opposed to the premise of the legislation.
“I don’t like the idea,” said Sen. Mike Rounds (R-S.D.), a committee member. “We send a terrible message when we start making it easier to move through on those issues of cannabis.”
Sen. John Kennedy (R-La.), another committee member, called the proposal “a bad idea,” saying it is “a long way from passing” the full Senate and the House.
Sen. Tim Scott of South Carolina, the top Republican on the Banking Committee and a presidential hopeful, has not yet announced a position on the bill. The markup is scheduled for the same day as the next GOP presidential debate.
“Members compromised, and that’s the way this should be,” Brown said of the agreement. “It’s not perfect, by a long shot. I think this is a big first step. There will be other steps down the road that could fine-tune this as we move forward.”
In terms of House prospects, Rep. Andy Barr of Kentucky, a Republican who chairs a subcommittee on bank regulation, said in an interview that the section of the bill dealing with closing customer accounts is “key.” Barr said he supports cannabis banking legislation for reasons related to Kentucky’s hemp industry
“I’ll be happy to advocate for it once the Senate produces something and we can take a look at it,” he said.
Politico Pro Cannabis: Schumer officially introduces updated cannabis banking bill
By Natalie Fertig
Majority Leader Chuck Schumer officially introduced the updated cannabis banking legislation as a new bill, now titled the Secure and Fair Enforcement Regulation Banking Act.
Joining Schumer (D-N.Y.) were Sens. Jeff Merkley (D-Ore.), Steve Daines (R-Mont.), Kyrsten Sinema (I-Ariz.) and Cynthia Lummis (R-Wyo.), who participated in discussions over the last few months to sort out concerns over Section 10.
“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the statement read. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”
Punchbowl News: McHenry keeps his cards close, options open on SAFE banking
The Senate Banking Committee will take up cannabis banking in a markup happening one week from today. But how the reform would fare in the Republican-led House – as always – remains an open question.
So we checked in with House Financial Services Committee Chair Patrick McHenry (R-N.C.), whose panel would receive any cannabis banking reforms that pass the Senate.
McHenry told us he hasn’t had any conversations with Senate Democrats about cannabis reform yet, saying he’d “look forward to seeing their markup.”
But the North Carolina Republican had this to say when we asked if he’d be open to that chat afterward:
“If they originate policy, I’m happy to talk to them about it. I’ve got policy I’ve originated too. They should be interested in talking to me about that as well …
“After the end of this week, we’ll have five major packages out of committee. Happy to talk about all of them.”
Let’s be clear: McHenry’s not really a fan of the Secure and Fair Enforcement Banking Act, which would formally clear banks to work with state-legal cannabis firms. We can’t say that baseline opposition has shifted.
What has changed, however, is the legislative environment between the two banking-centric committees.
Both panels have been busy during the 118th Congress, albeit with wildly different priorities. Senate Banking Committee Chair Sherrod Brown (D-Ohio) has cleared legislation that would introduce new accountability standards for bank executives, while McHenry has moved dozens of bills over the past year covering crypto, business capital formation and more.
So McHenry seems to be acknowledging the political reality of split government here: if any banking bills are going to make it to President Joe Biden’s desk anytime soon, the chambers will have to talk to one another.
Speaking of the Senate: We have our initial glimpse of the upper chamber’s latest take on cannabis banking reform
First things first, the bill’s acronym has a new letter: the Secure and Fair Enforcement Regulation Banking Act, or SAFER Banking Act.
Some of the most significant changes revolve around Section 10 of the bill, which had been the subject of recent negotiations between Senate Majority Leader Chuck Schumer, Sens. Jack Reed (D-R.I.), Steve Daines (R-Mont.) and Cynthia Lummis (R-Wyo.).
This part of the bill centers on banks’ ability to decline working with more controversial businesses, like firearms manufacturers, oil and gas firms or reproductive health clinics.
Meanwhile at the Federal Reserve: Chair Jay Powell will announce the U.S. central bank’s next move — or lack thereof — on monetary policy today at 2 p.m. Analysts widely expect the Fed to hold rates steady.
The key development for policymakers across Washington will be how exactly the Fed adjusts its economic forecast for the months ahead. We’ll have more in the Midday and PM newsletters today.
— Brendan Pedersen