A marijuana banking bill that’s set for a Senate committee markup next week may have an updated title and several new provisions related to federal financial regulations, guidance and reporting requirements, according to a summary.
The title of the legislation is reportedly being extended by one word. The bill that’s being circulated ahead of the Senate Banking Committee vote is now being called the Secure and Fair Enforcement Regulation (SAFER) Banking Act.
Importantly, the summary, first reported by Politico, offers a first look at the types of compromises senators appear to have made in order to bolster bipartisan buy-in. Several new provisions are described under Section 10—a component of the reform that Republicans have strongly favored and certain Democrats opposed over concerns it could undermine broader banking regulations.
It’s not clear whether the summary represents the latest agreement, or where it originated from. Marijuana Moment was unable to immediately independently verify the document shared by Politico.
Representatives of the offices of Senate Banking Committee Chairman Sherrod Brown (D-OH), Senate Majority Leader Chuck Schumer (D-NY) and the lead sponsors of the bill, Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) did not respond to requests for comment by the time of publication.
What are the proposed changes?
It should be noted that while the section-by-section summary largely aligns with the original Secure and Fair Enforcement (SAFE) Banking Act, the provisions are only briefly described and the full text of the revised legislation has not been released. Accordingly, it’s difficult to assess the substance and scope of the reported changes.
The summary of the first new subsection of Section 10 says that it “provides that while Federal banking agencies have a duty to ensure that banks and credit unions are operating in a safe and sound manner, personal beliefs or political motivations used to restrict access to financial services for lawful businesses have no place at a Federal banking regulator.”
On the one hand, this seems to reinforce a policy position supported by GOP members who have sought to use the cannabis bill as a vehicle to prevent financial regulators from discriminating against certain industries, such as the gun trade and lending institutions.
But Cat Packer, vice chair of the Cannabis Regulators of Color Coalition (CRCC) and director of drug markets and legal regulation at the Drug Policy Alliance (DPA), told Marijuana Moment on Tuesday that there’s another interpretation of the summary that could also support social equity objectives, such as those she proposed as part of a recent report on opportunities to improve the marijuana banking legislation.
While the provision “may have been” designed to appeal to GOP members,”the language can work towards both ends,” Packer said.
“I do think that that’s generally in line with what CRCC and DPA have been advocating—just recognizing, in part, that banking is extremely discretionary,” she said. “And banks have had the opportunity—and will have the opportunity to—make a discretionary decision about who they bank. Historically, it’s been minority, Black and brown communities who have been underbanked.”
The last three subsections of Section 10 also appear to be new, and two of them similarly appear to be at least partly responsive to policy recommendations promoted by equity advocates.
Subsection (f) would require federal banking regulators to work with state banking supervisors and the secretaries of commerce and treasury and, within two years of enactment, “promulgate tailored rules or guidance to increase access to deposit accounts for businesses and customers and to enable banks and credit unions to more effectively maintain customer relationships—especially for those in rural, low-and moderate-income areas, Tribal communities, and unbanked businesses and consumers.”
The description of increased access and the focus on underserved communities is welcomed by advocates—though, again, the actual text is not yet available.
Subsection (g) would require the Federal Deposit Insurance Corporation (FDIC) to “conduct a biennial survey and report to identify barriers to accessing deposit accounts for small-and medium-sized businesses.”
The apparent changes “run along the same vein” as what equity advocates have encouraged, Packer said. “I’m interested now to see the specific text of these provisions, in part because I think that they are well-aligned with some of the points that we’ve been raising.”
Another potential change to the bill is the mention of tribal communities in Section 10 and Section 11, which requires federal regulators to submit a report to Congress on access to banking for historically underbanked communities. Tribes are now listed beside minorities, veterans, women and state-sanctioned cannabis businesses as subjects of that report—which is not the case in the SAFE Banking Act as introduced.
There’s also another summary of a new subsection of Section 10 that says it “establishes a rule of construction that does not limit the ability of a Federal banking regulator from identifying or discussing issues with a depository institution’s financial condition, governance, consumer protection, internal controls, unsafe or unsound conditions, the Bank Secrecy Act, anti-money laundering or countering the financing of terrorism.”
All told, if the summary does represent the latest bipartisan agreement, it appears that the proposed additions could satisfy both sides of the aisle, with Section 10 kept “intact,” as Banking Committee member Sen. Kevin Cramer (R-ND) said this week, but also with new provisions to promote equity in the financial system.
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Sen. Jack Reed (D-RI), who also serves on the Banking Committee and previously raised concerns about Section 10, has also said that senators “talked extensively” about the language, “and we’ve made some progress.”
“I think we’ve resolved most of the issues we had—and I hope we have so we can get it out of the committee with a strong vote,” he said.
Meanwhile, Schumer and others have also discussed plans to amend the legislation on the floor to adopt “critical” criminal justice provisions such as expungements for prior marijuana convictions, calling broader effort to repair the harms of the drug war a “moral responsibility” for Congress.
A spokesperson Daines told Marijuana Moment in July that he is “open” to including the additional reform provision, even as he’s cautioned Democrats against significantly expanding the bill’s scope in a way that could jeopardize GOP support. As a standalone in its current form, insiders say the measure has enough Republican buy-in to reach the 60-vote threshold needed for passage in the Senate.
On Tuesday, a coalition of 35 cannabis trade associations, drug policy reform groups and a top national labor union called on Congress to help address the “humanitarian toll” of robberies targeting cash-intensive marijuana businesses by passing the SAFE Banking Act “this year.”
The American Trade Association for Cannabis and Hemp (ATACH)—along with trade groups representing marijuana businesses in 16 states plus Washington, D.C.—also sent a letter to Brown and Banking Committee Ranking Member Tim Scott (R-SC) in July, imploring them to pass the cannabis banking bill “without further delay.”
Also, the American Bankers Association (ABA) also renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.
July also marked the 10-year anniversary since the introduction of the first version of what is now known as the SAFE Banking Act.
Colorado Gov. Jared Polis (D) separately said in a recent letter to President Joe Biden that he should throw his support behind the congressional push for marijuana banking reform as the Drug Enforcement Administration (DEA) begins its review of cannabis scheduling after receiving a rescheduling recommendation from the top federal health agency.
Read the summary of the SAFER Banking Act below:
Photo courtesy of Max Pixel.