The Secure and Fair Enforcement Regulation Banking Act cleared the Senate Banking Committee Wednesday on a bipartisan vote.
It’s a significant milestone for the cannabis sector. This was the first time that the Senate has taken any formal vote on cannabis banking reform after more than a decade of advocacy.
But already, the politics surrounding the high-profile issue are starting to get tougher to manage. Progressives and conservatives are pulling hard (and in opposite directions) to expand the bill’s scope. The bigger this bill gets, the harder it will be to meet the Senate’s 60-vote threshold on passing anything of substance.
It was never going to be easy to get SAFER Banking through the Senate, but the challenges are cropping up fast.
Progressives want more: Sen. Raphael Warnock (D-Ga.) was the lone Democratic vote against the package on Wednesday, and his opposition was stark.
But many progressives aren’t exactly comfortable with a bill that, on its face, does more for banks and weed investors than any other bloc. Sen. Chris Van Hollen (D-Md.) all but threatened to vote against the bill on the floor unless there’s also a vote on the HOPE Act, which would help fund nonviolent weed expungements.
And Sen. Elizabeth Warren (D-Mass.) told us in an interview after the markup that “now is the time to push for racial justice.”
Waning Republican support: Three GOP members of the Senate Banking Committee supported cannabis banking Wednesday. That’s not bad, but advocates of the reform were hoping for a better showing.
Sens. Steve Daines (R-Mont.), Cynthia Lummis (R-Wyo.) and Kevin Cramer (R-N.D.) backed the bill. But lobbyists tracking these negotiations had hoped to pick up other committee members, including Sens. Thom Tillis (R-N.C.) or Katie Britt (R-Ala.).
It didn’t happen, and that gives Senate Majority Leader Chuck Schumer a smaller runway to deliver on cannabis reform. That’s making some proponents nervous.
Conservatives (also) want more: A key conflict for lawmakers in the weeks leading up to the markup was over Section 10 of the bill, which would crack down on regulators’ ability to discourage banks from working with certain businesses.
House Republicans have already made clear they’re not jazzed about the Senate’s approach for not going far enough. Rep. Blaine Luetkemeyer (R-Mo.) said in a statement Wednesday night he believed the SAFER Banking Act would still give regulators “broad discretion” to close the accounts of controversial causes.
“In its current state, the SAFER Banking Act will not make it through the House,” Luetkemeyer said.
Republican senators off the Senate Banking Committee will also introduce wrinkles of their own when the bill makes it to the floor.
We’re told that Sen. Ted Cruz (R-Texas) plans to introduce an amendment that would expand the Section 10 language beyond regulators to banks and other financial institutions themselves. That’s part of a broader focus from Republicans on the Senate Commerce Committee on how some banks may have pressured other businesses into terminating relationships with gun manufacturers in Texas.
ICYMI: The second edition of The Vault, our quarterly financial services newsletter, landed Wednesday. It features an exclusive interview with New York Department of Financial Services Superintendent Adrienne Harris, a look at how Wall Street is betting on Washington and more. Follow this link to read the full edition.
— Brendan Pedersen
