For the third time in just over a year, the House of Representatives has approved legislation that would protect banks that service state-legal marijuana businesses from being penalized by federal regulators.
The text of the Secure and Fair Enforcement (SAFE) Banking Act was included in a wide-ranging coronavirus relief bill that members approved on the floor on Thursday. This is the second time the House inserted the cannabis banking language in COVID-centric legislation that cleared the chamber after having previously passed it as a standalone bill. While the scope of the latest pandemic relief proposal was generally scaled back in an attempt to make it more palatable to the GOP-controlled Senate, the marijuana provisions remained intact.
The bill, known as The Heroes Act, was approved in a vote of 214-207.
Several Republicans—including Senate Majority Leader Mitch McConnell (R-KY) and Vice President Mike Pence—have criticized including marijuana components in coronavirus legislation, arguing that it is not germane to the issue at hand. McConnell has specifically targeted most of his criticism at a provision of the SAFE Banking Act that requires industry diversity reporting.
A day before Thursday’s vote, the majority leader took to the floor of his own chamber to complain that the House bill provides “special treatment to the marijuana industry,” stating that the legislation “mentions the word ‘cannabis’ more times than the words ‘job’ or ‘jobs.’”
The Senate did not add cannabis banking language to its own version of COVID relief legislation filed in July.
But Democratic leaders are evidently willing to keep up the fight, and they highlighted the diversity component in a summary of the legislation. House Speaker Nancy Pelosi (D-CA) said in July that she agrees that the banking measure is an appropriate component of the bill.
Reform advocates view this as a positive development that could help mitigate the spread of the virus by ending the industry’s reliance on cash transactions. It could would also increase access to financial institutions in a way that could give small businesses access to needed capital, they say.
“The continued inclusion of my SAFE Banking Act in this package is important for the cannabis industry and its workers,” Rep. Ed Perlmutter (D-CO), the lead sponsor of the standalone marijuana financial services legislation, said. “The industry faces an increased public safety risk and public health risk by being forced to make transactions in all-cash. The SAFE Banking Act, which already passed the House with a broad bipartisan vote, will take cash off the streets, enable better social distancing in transactions, and support good-paying jobs in communities across the country when we need them most.”
That said, there’s lingering frustration that House leadership is willing to stand up to GOP opposition for a measure considered industry friendly but decided to postpone a floor vote on a comprehensive legalization bill amid the objections of certain centrist Democratic members who worried about optics. Those legislators convinced leadership to delay the vote until later in fall, likely after the election.
In the past, some activists have made the case that lawmakers should’t approve the SAFE Banking Act until marijuana is descheduled and restorative justice policies are implemented.
In July, bipartisan treasurers from 15 states and one territory sent a letter to congressional leadership, urging the inclusion of the SAFE Banking Act in any COVID-19 legislation that’s sent to the president’s desk. Following GOP attacks on the House proposal, a group of Democratic state treasurers renewed that call.
The House last year approved the standalone SAFE Banking Act. For months, the legislation has gone without action in the Senate Banking Committee, where negotiations have been ongoing.
Meanwhile, Treasury Sec. Steven Mnuchin and congressional leaders have been negotiating the details of a coronavirus aid package. It’s not clear if cannabis banking provisions stand a chance of earning the Trump administration’s support, but approval from the White House would likely help to get the Senate to go along.
This story has been updated to include comment from Perlmutter.
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