House passes marijuana banking bill
However the legislation faces an uncertain future in the U.S. Senate.
Voting 321 to 103, the House passed H.R. 1595. The bill went to the floor using a process that suspended House rules, meaning that debate would be limited and two-thirds of those voting would have to vote in favor for it to pass.
Senate action on the legislation remains unclear, although Banking Committee Chairman Mike Crapo (R-Id.) has said he may allow a committee vote before the end of the year.
Under federal law, financial institutions, including credit unions, may face regulatory sanctions if they provide services to cannabis-related businesses since marijuana is illegal under federal law.
The bill’s primary sponsor, Rep. Ed Perlmutter (D-Colo.), said during floor debate that cannabis businesses must now rely on cash since they cannot obtain financial services.
He said that the bill “is narrowly tailored to get cash off the streets.”
Rep. Denny Heck (D-Wash,) said the legislation is a public safety issue, citing the story of a Marine veteran who was killed while working at a legal marijuana business.
“If we do nothing, bad things will happen again,” he said.
However, House Banking Committee ranking Republican Patrick McHenry (R-N.C.) said the bill would allow financial institutions to do business with cannabis-related businesses even though marijuana is illegal under federal law.
He said that Congress has not addressed the public health issues that marijuana may pose and that the legislation could open the banking system to drug cartels.
“There are many other questions left unanswered,” he said.
Rep. William Huizenga (R-Mich.) criticized states for legalizing marijuana even though it is still illegal on the federal level.
“We have states that have decided to violate federal law,” he said.
As passed by the House, the bill would also prohibit financial institutions from terminating a customer’s account unless the institution has a valid reason; that reason may not be solely based on reputational risk.
That provision of the bill is intended to ensure that projects like the Obama Administration’s Operation Choke Point may not be repeated.
That project was intended to hold financial institutions accountable for processing transactions they knew were fraudulent.
Critics have said that the program empowered financial institutions to decline to provide services for controversial businesses, such as gun dealers and payday lenders.
The bill would also push federal regulators to ensure that financial institutions can provide services to hemp-related businesses. Hemp is a special interest of Senate Majority Leader Mitch McConnell (R-Ky.), who controls which bills go to the Senate floor.
McHenry said those two provisions in the bill improved the legislation, but that he still would not support it.
Several progressive and civil rights groups had urged the House to delay the vote on the bill, so that Congress could debate the broader marijuana question.
House Financial Services Chairwoman Maxine Waters (D-Calif.) said she looks forward to legislation addressing the larger issues when the bills come to the floor but urged members to vote in favor of the banking bill.
This story first published on cutimes.com.
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