September 27, 2023
Senate Banking to consider cannabis banking legislation
It’s another historic day for the Senate Banking Committee, which will convene a markup this morning to consider cannabis banking legislation for the first time.
This is the second markup we’ve seen from Chair Sherrod Brown (D-Ohio) this year. The first was a masterclass in bipartisan dealmaking, where ranking member Tim Scott (R-S.C.) and nearly every Republican on the committee joined Democrats to pass bank executive accountability legislation.
The markup today is going to be a bit different.
The central reform within the Secure and Fair Enforcement Regulation Banking Act, or SAFER, remains (mostly) uncontroversial. Banks want a safe harbor to work with state-legal cannabis firms. But machinations around the SAFER Banking Act have devolved into a Republican fight that has little to do with weed.
Since the unveiling of the bill text last week, lawmakers and committee staff have been scrambling to smooth over disagreements and concerns primarily about Section 10. That’s a provision limiting bank regulators’ authority to discourage banks from working with certain controversial clients. Progressives fear the Senate’s provision will limit regulators too much, but House conservatives want it strengthened.
Sen. Cynthia Lummis (R-Wyo.), a driving force behind the latest Section 10 wrangling, put it to us like this last night when asked about possible amendments heading into the markup:
Other lawmakers involved in the talks include Senate Majority Leader Chuck Schumer, Sens. Steve Daines (R-Mont.) and Kyrsten Sinema (I-Ariz.), as well as the committee’s staff.
Can I see a manager? Sources close to the committee told us some progress has been made on “technical” amendments as of Tuesday night. But it appears that there won’t be a manager’s package of more substantial changes.
Without a manager’s package, today’s markup will be more unwieldy. We expect a number of lawmakers to show up with amendments to pitch in real-time during the hearing.
Another wrinkle for the committee will be attendance. Scott, who is a “no” and will vote by proxy, will be in California tonight for the second GOP presidential debate. Sen. Tina Smith (D-Minn.) is out with a positive COVID test. And Sen. Bob Menendez (D-N.J.) will be in New York City for reasons you, dear reader, should be familiar with by now.
Still, Brown was upbeat Tuesday night about the committee’s chances of a strong bipartisan markup. “I don’t know exactly how many votes we’re going to have, but we’re going to have a comfortable majority,” Brown told reporters.
The long game: Senators are trying to create a bill that could pass muster in the Republican-led House. There are a lot of GOP House members who could support cannabis banking reform in theory.
But there are already complaints about Section 10 being too watered down for conservatives to support. This will be a tough, tough needle to thread.
— Brendan Pedersen
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