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Federal cannabis banking reform now has public support from nine Republicans in the Senate, enough to avoid a possible filibuster on the floor of the chamber should Democrats come together.
This GOP threshold for support comes with Sen. Susan Collins, R-Maine, adding her name as a co-sponsor July 13 to the Secure and Fair Enforcement (SAFE) Banking Act. Collins also co-sponsored the 2021 SAFE Banking Act.
The SAFE Banking Act—legislation that would allow federally regulated financial institutions to work with state-legal cannabis businesses that often are forced to operate in all cash—has been absent of Senate action the past four years despite large bipartisanship that has led to seven passages in the House since 2019.
Now, with major movement in the Senate Banking Committee, chaired by Sen. Sherrod Brown, D-Ohio, the legislation finally shows promise for a pathway to the Senate floor should lawmakers overcome an impasse in committee over concerns raised by majority member Sen. Jack Reed, D-R.I., Politico reported.
These concerns deal with Section 10 of the legislation: requirements for deposit account termination requests and orders. Specifically, Reed has concerns that this section of the bill would make it more difficult for federal regulators to raise the alarm about bad actors who pose significant risks to banks without “tipping off” these actors before enforcement measures.
“[Section 10 is] not limited to marijuana industry/cannabis industry, so it could allow permit schemes or all sorts of other interesting activity to go on without an effective response by the regulator,” Reed said during a May 11 committee hearing with expert witnesses from the industry.
RELATED: SAFE Banking Testifiers Provide Mixed Reviews in Senate Banking Committee Hearing
“In addition, Section 10 will require a bank to provide a notice to a customer when the federal government suspects they may be engaging in illegal activity,” Reed said. “Well, that’s like warning people to get out of town and take the money and run.”
Reed went on to question committee hearing testifier Cat Packer, vice chair of the Cannabis Regulators of Color Coalition, director of drug markets and legal regulation for Drug Policy Alliance, and a former head cannabis regulator for Los Angeles. Reed asked Packer if it would be sensible to limit the scope of the SAFE Banking Act to simply the cannabis industry and not have “this wide open restraint of federal regulation” in the bill.
“I think if there’s an intent to use the bill to do something else, maybe it’s appropriate for another bill,” Packer said.
Reed replied, “I think that’s great. In fact, I think your reaction is probably the reaction of everyone saying, this is all about cannabis banking, and suddenly we have a provision that would stop a regulator from going to a bank and questioning a relationship with a customer who may be a surrogate of a foreign power that’s doing things here we don’t like to be doing. And so I would hope that we could look very carefully at this.”
On that note, Reed said the committee has more work do before giving the nod to the legislation, and that stance is where the hiccup in a potential committee vote has caused a stall this week, which could delay movement on the legislation ahead of the August recess for Congress.
Should the 23-member Banking Committee—which includes SAFE Banking Act sponsor Steve Daines, R-Mont.—overcome this snag and send the legislation to the Senate floor for a vote, the chances for a potential filibuster are now severely limited. That’s the positive news for industry advocates this week with Collins signing on as a co-sponsor for the legislation.
With Collins’ support, eight Republicans in the upper chamber now have their names signed to the bill, and another Republican, Sen. Tommy Tuberville, of Alabama, confirmed his support May 9 with Cannabis Business Times. That makes nine.
GOP Supporters
- Sen. Steve Daines (Mont.), Primary Sponsor, Banking Committee Member
- Sen. Bill Cassidy (La.), Original Co-Sponsor
- Sen. Kevin Cramer (N.D.), Original Co-Sponsor, Banking Committee Member
- Sen. Cynthia Lummis (Wyo.), Original Co-Sponsor, Banking Committee Member
- Sen. Lisa Murkowski (Alaska), Original Co-Sponsor
- Sen. Ran Paul (Ky.), Original Co-Sponsor
- Sen. Dan Sullivan (Alaska), Original Co-Sponsor
- Sen. Tommy Tuberville (Ala.), Confirmed Support May 9 With CBT
- Sen. Susan Collins (Maine), Co-Sponsor as of July 13
This support means the legislation likely has the votes it needs, 60, to avoid a filibuster in its current form with Democrats and Independents controlling a 51-49 majority in the chamber: The 51 majority plus nine Republicans equals 60.
In addition, Sen. Mike Lee, R-Utah, indicated his openness to cannabis banking reform in a 2019 radio interview; Sen. Marco Rubio, R-Fla., indicated his potential support for SAFE Banking in 2019; and Sen. Ron Johnson, R-Wisc., said in an October 2022 debate that the federal government should make banking available to the cannabis industry.
While the U.S. House passed the bill seven times under Democratic control between 2019 and 2022, including twice as standalone measures, and with wide bipartisan support, all eyes have been on the Senate as of late.
With at least nine Republicans now on board, SAFE Banking largely lies in the Democrats’ court—notably with Brown and Sen. Chuck Schumer, D-N.Y., the majority leader.
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