Banks wishing to do business with the marijuana industry without fear of government reprisal inched closer to reality — again — when a Senate committee Thursday approved a measure — again — to do just that.
A bill nearly identical to one passed by the Senate last year, this time sponsored by Oregon Sen. Jeff Merkley and Washington Sen. Patty Murray, was approved by the Senate Appropriations Committee and would forbid the use of federal funds to penalize a financial institution that works with marijuana enterprises legally operating under state laws.
Last year’s effort failed to reach any debate in the House, a similar fate suffered in 2013 of a bill passed by the House and later stifled in the Senate.
But the third time could be a charm.
This time committee members passed the measure as an amendment to the Financial Services and General Government Appropriations Bill, which gives annual funding for some government operations. This year’s bill, which funds the Treasury Department, the judiciary and agencies such as the Securities and Exchange Commission, is about $22 billion.
“This amendment is really about providing clarity, stability, and security for our banks, credit unions, and small business owners who want to be able to operate in full daylight,” Murray said in a statement.
Pot banking issues
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The amendment passed 16-14 and was met with cautious optimism by an industry that’s said banking is a critical need for businesses forced to operate mostly in cash.
“While an appropriations amendment isn’t a permanent fix to the banking problem, it is a significant step to correct a dangerous and unfair burden on responsible small-business owners and regulators,” National Cannabis Industry Association executive director Aaron Smith said in a statement.
Stand-alone legislation has been introduced in each house of Congress — S.1726 by Merkley and H.R.2076 by Rep. Ed Perlmutter of Arvada.
“I’m pleased to see the Senate taking action to help provide access to the banking system for legal and licensed marijuana businesses,” Perlmutter said in a statement. “I plan to offer the same amendment in the House so financial institutions are not penalized for helping to get cash off our streets which is a serious public safety concern for our communities.”
The U.S. Department of Justice has said it wouldn’t spend time prosecuting financial service companies that work with legal marijuana businesses as long as it following strict guidelines of compliance — but stopped short of offering blanket protection against enforcement. Many bankers worry that they could risk losing accreditation and face money-laundering charges if a marijuana business client turns out to be a front for the illegal drug trade no matter how diligent they are at vetting them.
Other efforts have included a push to legalize a credit union in Colorado specifically for the marijuana industry. The Fourth Corner Credit Union, though it obtained state approval to operate, was stymied in its work at landing a critical master account with the Board of Governors of the Federal Reserve System when that group’s rejection was later upheld by a federal judge.