Time has run out in 2021 for the SAFE Banking Act to clear Congress.
While the door to federal reform on cannabis and banking appeared to crack open this month, it slammed shut when the final bill text of the National Defense Authorization Act for Fiscal Year 2022 had one very noticeable omission: the SAFE Banking Act.
The Secure and Fair Enforcement Act, which would provide safe harbor to financial institutions that want to provide banking services to the cannabis industry, has received major boosts of support in recent weeks. But that wasn’t enough to secure its inclusion in the negotiated military defense bill, which was intensely negotiated between the two Congressional chambers. On Tuesday, final NDAA bill text was released without SAFE Banking Act language. The House passed the SAFE Banking Act this April, as it did in 2019, but it again stalled before making headway in the Senate.
During a House Rules Committee meeting on Tuesday, House lawmakers placed blame for the Act’s sputtering squarely on the Senate. Rep. Ed Perlmutter, of Colorado, said during the hearing that “obviously, putting it in the NDAA was not my first choice,” but that the Senate’s “refusal” to progress the Act led to its inclusion.
“It is frustrating. And so then what you have to do is you have to take it up a notch, take it up two notches, to get somebody’s attention. Well, we took it up several notches by putting it in the NDAA,” Perlmutter said.
Meanwhile, there was pressure from some corners of the cannabis industry over the past week for Senate Majority Leader Chuck Schumer to throw his weight behind the SAFE Banking Act. Schumer and Senators Ron Wyden and Cory Booker released the Cannabis Administration and Opportunity Act (CAOA) discussion draft earlier this summer, a comprehensive plan to legalize and regulate cannabis at the federal level.
“Precisely why the Majority Leader Mr. Schumer is opposed to this is still pretty much a mystery to me, makes no sense, because of the public safety aspect, the minority business aspect,” Perlmutter said. Schumer did not respond to Cannabis Wire’s request for comment.
Wyden told Cannabis Wire that the CAO Act would take care of banking issues for the cannabis industry — and more.
“The banking issue is a public safety issue and equity issue for small businesses and minority entrepreneurs — and it should be addressed. The comprehensive reform bill that Leader Schumer, Senator Booker and I have put out will get at this issue and the countless other problems caused by the failed cannabis prohibition. We’re full steam ahead,” Wyden told Cannabis Wire by email.
Perlmutter also highlighted recent public safety concerns related to the more cash-driven nature of the cannabis industry, referencing robberies in Oklahoma and the Bay Area of California.
“The reason it was germane to the NDAA was because of the components concerning cartels and foreign money laundering,” Perlmutter said.
The SAFE Banking Act is included in far more lobbying registrations than other cannabis bills in Congress, from counties and cities across California, Nevada, and Oregon to Paypal, the American Bankers Association, and national insurance organizations, as Cannabis Wire has reported. Cannabis companies have registered to lobby on the SAFE Banking Act, too, including Curaleaf and PAX Labs, as well as cannabis groups like Cannabis Trade Federation and the National Organization for the Reform of Marijuana Laws.
Perlmutter is “disappointed the SAFE Banking Act is not included in the NDAA bill text released,” Perlmutter’s spokesperson said in a statement to Cannabis Wire. “The Senate insists on burying its head in the sand and deny every opportunity to reform our outdated cannabis laws to align state and federal law to improve public safety.”
Perlmutter announced on Twitter on Tuesday that he intended to file an amendment to the NDAA in the Rules Committee to include the SAFE Banking language in the final bill. But several lawmakers pointed out the difficulty of considering additional amendments to the behemoth legislative package, and the further delays that could be caused. Perlmutter said during the House Rules Committee hearing that he wouldn’t be bringing the amendment forward.
Maritza Perez, director of the office of national Affairs for the Drug Policy Alliance, told Cannabis Wire that she felt “relief” at the removal of SAFE Banking from the NDAA.
“I think that Congress would have been making a huge mistake by prioritizing that bill over something that’s more comprehensive that centers people have been most impacted by the war on drugs,” Perez said, adding that DPA is going to “push” for the Marijuana Opportunity Reinvestment and Expungement (MORE) Act to pass in the House. The MORE Act, which would end the federal criminalization of cannabis, but, unlike the CAO Act, does not comprehensively address regulation, was reintroduced in the House in May.
In addition to clearing a path for banks, the MORE Act, Perez added, includes “specific carve outs,” like funding for the Small Business Administration to give technical and financial support to “underserved populations” to launch cannabis businesses.
“As we’ve seen with the conversation around the SAFE Banking bill, it’s a bill that many people on the Hill want to see go through, including Rep. Perlmutter. So to the extent that we can work with his office to actually make it a true equity bill, we would welcome that,” Perez said.
Tension over which legislation should advance first, and where Congress’ priorities should be with regard to cannabis reform, has increased throughout the year, as Cannabis Wire has reported. And going into 2022, with yet another legalize-and-regulate proposal in Congress, this time from the GOP, the debate over what-to-pass-when will only intensify.
The American Bankers Association told Cannabis Wire on Tuesday that the group was “disappointed that Senate leaders chose not to advance the SAFE Banking Act.”
“We remain confident that Congress will eventually pass this commonsense, bipartisan legislation to enhance public safety and end the legal divide between state and federal law when it comes to banking cannabis,” ABA spokesperson Blair Bernstein told Cannabis Wire.
The Credit Union National Association similarly told Cannabis Wire that they were “disappointed.”
“Passing the NDAA is an important annual milestone for Congress, and we are disappointed the SAFE Banking Act provisions were not included in the final bill,” Jason Stverak, CUNA’s deputy chief advocacy officer, told Cannabis Wire by email. “Its bipartisan support in both chambers proves that it is a common-sense solution for our country’s evolving stance on cannabis policy.”
What’s next for SAFE Banking? Perlmutter indicated during the House Rules hearing that he was thinking about “throwing procedural wrenches into everything,” with the goal of pushing a vote on the legislation.
Meanwhile, Rep. Jamie Raskin, of Maryland, said during the hearing, essentially: where there’s a will, there’s a way.
“If the Senate can’t see fit to agree to do it in this context, we’ve got to find another vehicle to make that real,” Raskin said.
Rep. Adam Smith, who represents the District of Columbia, referenced the waning days of 2021, or the “time of year when the first reflex of answer” is “no.”
“Using the NDAA process to force that issue in a more democratic direction, I think, is an incredibly important thing that we do,” Smith said, of the SAFE Banking Act language. “Whatever the pain is, at the end of the process, I think we have made progress on this issue. And the Senate is under a lot more pressure to do something.”
Smith added, “We’ll keep pushing it. We just didn’t quite get there this time.”