Let banks serve pot businesses

House panel approves landmark bill to let banks serve pot businesses

By VICTORIA GUIDA

The House Financial Services Committee on Thursday approved landmark legislation aimed at helping financial institutions serve marijuana businesses, as efforts to allow use of the drug continue to advance in almost all 50 states.

The bill, sponsored by Reps. Ed Perlmutter (D-Colo.) and Denny Heck (D-Wash.), would shield banks and credit unions from federal regulatory penalties if they serve marijuana businesses legalized at the state level. It was approved along with an amendment from Rep. Steve Stivers (R-Ohio) that would extend the same treatment to insurers.

The legislation, which has nearly 150 cosponsors, now goes to the full House for a vote.

The majority of Republicans on the committee voted against the measure, which was sent to the full House on a 45-15 vote, with multiple lawmakers arguing that Congress should first consider the legality of marijuana more broadly.

“This bill creates more problems than it solves,” Rep. Blaine Luetkemeyer (R-Mo.) said at the markup on Wednesday. He and Rep. Patrick McHenry (R-N.C.), the panel’s top Republican, had asked Chairwoman Maxine Waters (D-Calif.) to delay the markup of the bill to give more time to consider it and its web of implications.

Democrats pointed to dangers arising from the mismatch of state and federal restrictions, which has left banks skittish about serving legitimate cannabis businesses. That has forced the marijuana purveyors to transact in cash, exposing them to theft and violence.

“This bill, while difficult and complex, in the final analysis is a fairly elegant solution to three problems,” Heck said. He said it would protect communities and save lives; prevent disruptions for people who interact with marijuana businesses, such as employees and subcontractors; and enhance supervision and the ability to audit such businesses.

“The toothpaste is out of the tube, my friends,” he added. “Forty-seven states, 98 percent of the public is covered in the states that deserve this.”

The committee agreed to amendments making it clear that new banks are also covered under the bill and requiring the Government Accountability Office to carry out a study on the effectiveness of reports of suspicious transactions.

But a slew of other proposed amendments were shot down, including one from Luetkemeyer that would have included “legal entities operating in accordance with Federal law” in the safe harbor. The language was aimed at heading off revival of a controversial Obama-era program that discouraged banks from doing business with a range of companies, from payday lenders to gun retailers, known as “Operation Choke Point.”

“If we are going to offer protection to businesses in contravention of federal law, the least we could do is protect those businsses operating in accordance with federal law,” he said.

Although only three amendments were approved in committee, Perlmutter, who also sits on the Rules Committee, said he would be happy to negotiate with anyone on potential amendments when the legislation moves to the full House.

“I want to move it to the Senate; they’ve got other rules and kinds of approaches that they take to legislation,” he said. “We may be able to do some other things over there.”

“I do intend to work with all of you to make this better to get the cash off the streets,” he added.