WASHINGTON–Senate Banking Committee Chairman Mike Crapo (R-ID), who said he remains “firmly opposed” to the legalization of marijuana on the federal level, is inviting public feedback on ways to address public health and money laundering related to cannabis banking.
Crapo also said he remains opposed to the SAFE Act, which has been passed by the House and which has the strong backing of credit unions.
In a statement issued by Crapo’s office, the senator said he is also seeing input on “Operation Choke Point,” which the statement described as an “Obama-era initiative in which federal agencies devised and relied upon a list of politically disfavored merchant categories (e.g., firearm manufacturers, payday lenders, etc.) with the intent of ‘choking-off’ these merchants’ access to payment systems and banking services.”
“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho,” said Crapo in a statement. “I also do not support the SAFE Banking Act that passed in the House of Representatives. I have significant concerns that the SAFE Banking Act does not address the high-level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system. I welcome input from all interested parties on how to thoughtfully address these concerns.”
‘Challenge’ Created
Crapo’s office noted 33 states now have some form of legal marijuana for a variety of uses, which has “created challenges for businesses in those states and has resulted in increased pressure for depository and financial institutions to provide financial services to both state-sanctioned businesses and ancillary services providers that may provide services to state-sanctioned businesses.”
But the ancillary service providers offer a variety of services to state-sanctioned businesses, Crapo added, such as legal services, plumbing services, fertilizers and other agricultural supplies, real estate, and leasing, among many others. Crapo ponted to S. 1200, introduced by Senators Jeff Merkley (D-OR) and Cory Gardner (R-CO) under which marijuana would still be illegal at the federal level, but the legislation would provide legal certainty for banks that wish to serve not only marijuana companies, but also the ancillary service providers, “meaning that banks can accept cash from legally-operating state cannabis companies and related service providers without the fear of adverse actions being taken against them by federal financial regulators.”
CUNA Response
In a statement, CUNA repeated its support for the SAFE Banking Act, saying it would help ensure access for state-sanctioned businesses in the mainstream financial system. Credit unions that choose to provide cannabis banking use rigorous screening and compliance protocols to appropriately monitor and maintain high-risk accounts.
“We appreciate Chairman Crapo sharing his concerns with the cannabis banking policy landscape,” said Ryan Donovan, CUNA’s chief advocacy officer. “America’s credit unions are eager to continue engaging with the Chairman as he seeks a solution that enhances community safety through access to mainstream financial services.”
No Consensus
Added John Mckechnie, a senior partner with the Washington advocacy firm Total Spectrum, “It should come as no surprise that a complicated issue like cannabis banking is, well, complicated, as demonstrated by Chairman Crapo’s statement. Credit unions are right in wanting clarity from Congress, but the number of moving parts to this issue counsels patience. I don’t think there’s anything resembling consensus on the Hill regarding this issue.”
Senator Seeks Input
The issues on which Crapo is seeking input include:
- Options for addressing public health and safety concerns
- Options for addressing legacy cash and money laundering
- Options for addressing interstate commerce and banking
- Options for addressing hemp provisions and Operation Choke Point
Public feedback can be provided to committee staff at submissions@banking.senate.gov.