Congress took its first step Wednesday toward allowing state-sanctioned marijuana businesses to access banking products without fear of a federal government crackdown.
That step included support from Rep. Cathy McMorris Rodgers, an Eastern Washington Republican who has spoken against the state’s legalization of recreational marijuana and received criticism from cannabis reformers hoping to fully legalize the drug.
“I heard from a lot of banks and credit unions about the increased amount of cash that is on our streets, and the danger that it poses for our community,” McMorris Rodgers said in an interview following her vote.
The bill, sponsored by Rep. Ed Perlmutter, D-Oregon, prohibits federal regulators from penalizing or limiting financial services offered by lending institutions working with marijuana businesses that followed state laws. The bill passed 321-103with 91 Republicans voting in favor, many of them saying they supported the bill’s narrow scope that is intended to keep such businesses from relying solely on cash. That can make them targets for crime, bill supporters argued.
Many banks and credit unions have avoided working with cannabis businesses, as the drug remains illegal under federal law. Locally, Numerica Credit Union offers a limited set of financial services to growers, processors and retailers.
The U.S. Treasury Department keeps track of banks and credit unions nationwide reporting activity with marijuana businesses as part of its suspicious activity reports program. The department reported in June that there were 715 lending institutions nationwide that were conducting business with marijuana firms.
Advocates pushing for further reform of federal marijuana laws, including the potential declassification of the drug as a controlled substance, heralded Wednesday’s vote. It is the first time Congressional lawmakers have approved any legislation dealing only with marijuana, as more and more states legalize its sale to both medical patients and as a recreational drug.
“For the first time ever, a supermajority of the House voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization,” Justin Strekal, political director of the National Organization for the Reform of Marijuana Laws, said in a statement.
The bill doesn’t change marijuana’s classification as illegal under federal law. It also doesn’t address the Justice Department’s apparent attempts to keep bankruptcy cases from people declaring marijuana income out of the courts.
McMorris Rodgers said her support for the legislation was due to its narrow scope. But the congresswoman noted that she’s also co-sponsored another marijuana bill introduced by Oregon Democratic Rep. Ed Blumenauer which would enable the sale of marijuana seeds and plant starts to researchers licensed by the federal government for medical study.
“I continue to have concerns about legalization of recreational marijuana, in particular,” McMorris Rodgers said. “I’m concerned about the safety around it, especially for our kids.”
The House’s approval of the bill sends the legislation to the Republican-controlled Senate, where another Western GOP lawmaker has already convened an informational hearing about a companion bill.
Idaho Sen. Mike Crapo, chairman of the Senate’s Banking Committee, held a hearing in late July on similar bipartisan legislation, but no votes were taken. At the time, Crapo said he was interested in learning more about the legislation, but also concerned about a 2013 Justice Department initiative under President Barack Obama that targeted firearm sellers, payday lenders and other businesses believed to be at risk of committing financial crimes.
“Having a conversation about whether banks should be able to provide banking services to entities engaged in federally illegal behavior brings up the issue and concern that there has been a push to choke off legal industries from the banking sector,” Crapo said at the July hearing.
Strekal and representatives of other marijuana reform organizations urged the Senate to take up the legislation in statements Wednesday. President Donald Trump has not given clear indication whether he would sign marijuana banking legislation if it were to pass both chambers of Congress, but he expressed some support for another bipartisan bill introduced in Congress that, among other changes, would give state-sanctioned marijuana businesses access to banking.
Crapo told reporters for the publication Congressional Quarterly on Wednesday that he wanted to consider a banking bill, which could be separate from the House bill, in the Senate soon.
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