WASHINGTON (CN) — The Senate took yet another step Wednesday to relax federal restrictions on marijuana, as its banking committee voted to advance a measure that, if made law, would grant cannabis businesses access to banking services.
The sweeping legislation, known as the Secure and Fair Enforcement Regulation Banking Act, cleared the Senate Committee on Banking, Housing and Urban Affairs on a bipartisan 14-9 vote.
If made law, the bill, abbreviated as the SAFER Banking Act, would bar banks from refusing financial services to state-authorized marijuana businesses based on industry alone. The measure would also offer legal protections for institutions that provide financial services or insurance to cannabis businesses.
For some lawmakers, the legislation is a necessary step to help a growing industry that has so far been stifled by a cash-only business model.
Ohio Democrat Sherrod Brown, who chairs the Senate’s banking panel, said during a bill markup Wednesday that forcing cannabis businesses to be completely liquid is a public safety issue.
“Employees become targets for violent robberies, which under the most devastating circumstances can turn deadly,” Brown said, adding that the cash-only model also proves a challenge for cannabis workers who are looking to rent a home or apply for a mortgage.
“The focus is on workers,” the lawmaker said.
Oregon Senator Jeff Merkley, a Democrat and co-sponsor of the bill, said allowing marijuana businesses to use banking services would help to curb organized crime in the industry.
“Unbanked operations operating in cash is the easiest way to engage in all sorts of organized crime activities, including expanded activities in areas other than cannabis, like fentanyl,” Merkley said. “If anything, this bill will help.”
The lawmaker added that the bill’s language will prevent federal banking regulators from behaving like “moral police.”
“They shouldn’t be deciding that legal businesses should be unbanked simply because they don’t like the business that they’re in,” Merkley said. “This bill sends a powerful message in that regard.”
Committee Republicans backing the legislation couched their support in terms of public safety interests. Montana Senator Steve Daines, the measure’s GOP co-sponsor, said he was opposed to efforts to federally legalize or decriminalize marijuana. The bill in question, he argued, was not about that.
“This bill is about public safety, first and foremost,” Daines said, reiterating concerns that cash-only businesses are prime targets for theft and organized crime. “The key to addressing this risk is by ensuring that all legal businesses have access to the banking system.”
The Montana Republican also expounded on the bill’s language barring industry-based discrimination by financial institutions, arguing that such a model could be expanded beyond cannabis businesses.
“This legislation takes an important step forward in ensuring that regulators never again have an opportunity to target any legal business, Daines said, “including gun manufacturers and distributors, or energy companies, because of political differences.”
The senator was referencing Operation Choke Point, a 2013 Justice Department initiative which investigated banking institutions that provided services to gun manufacturers and other businesses the federal government considered fertile ground for money laundering schemes. Critics of the effort, including congressional Republicans, said the government was putting undue pressure on the financial industry.
Despite bipartisan support for the cannabis banking bill, lawmakers on both sides spoke out against the measure Wednesday, arguing — albeit in different ways — that it would actually do more harm than good.
Idaho Republican Mike Crapo, citing Operation Choke Point, argued that the bill’s provisions barring financial regulators from putting their finger on the scales do not go far enough.
Offering an amendment to the legislation, the lawmaker said that banks should not be forced to rescind a company’s banking access based on reputational risk concerns — whether possible financial losses related to negative publicity or stakeholder opinions.