The nation’s banking institutions are fighting back against Attorney General Jeff Sessions and his archaic and outdated attempts to roll back pot progress. The marijuana banks have begun a big lobbying push to loosen federal restrictions on the surging legalized cannabis industry.
Empowered by support from both President Donald Trump and Sen. Elizabeth Warren (D-Mass.) — two relentless foes on most other issues — top banking trade groups are pressing policymakers to make it easier for their members to serve cannabis businesses that are now legal in states like California and Colorado.
“If we’re not at a turning point, we’re very close to it,” said Cam Fine, the former head of the Independent Community Bankers of America trade association.
Even Jerome Powell, chairman of the Federal Reserve, is pushing for action on the issue.
“This is a very difficult area,” Powell said during a press conference this week. “It puts federally chartered banks in a very difficult situation. It would be great if that could be clarified.”
Lenders see the potential for lucrative business in working with the industry. So they’re backing proposals that would address conflicts between a growing number of permissive state laws and the longstanding federal ban on the sale of marijuana that has chilled banks’ appetite to offer accounts to pot-related businesses.
The unresolved legal questions have been heightened by Sessions’ public campaign against legalizing marijuana. That’s left many banks on the sidelines and forced pot businesses to carry out transactions in cash, making them a target for theft and violence.
The American Bankers Association believes “the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use,” a spokesman said.
“Those banks, including institutions that have no interest in directly banking marijuana-related businesses, face rising legal and regulatory risks, and ever-increasing ambiguity and uncertainty, as the marijuana industry grows,” the spokesman said. The ABA’s membership includes thousands of large and small banks.
The Independent Community Bankers of America, which represents the nation’s smallest lenders, went a step further last week by endorsing for the first time a pot banking bill that would restrict federal regulators from penalizing banks that provide services to marijuana businesses.
The bill by Democratic Reps. Ed Perlmutter of Colorado and Denny Heck of Washington has more than 90 co-sponsors, including 13 Republicans. Sen. Jeff Merkley (D-Ore.) has introduced a companion bill with 17 co-sponsors, including 12 Democrats, four Republicans and Sen. Bernie Sanders (I-Vt.). The Credit Union National Association said Tuesday it also supports the legislation.
The community bank trade association’s decision to back the bill followed a decision by its board in March to get behind marijuana banking legislation, said Aaron Stetter, the group’s executive vice president of policy and political operations.
One catalyst for the banks to act more aggressively was Sessions’ decision in January to withdraw Obama-era guidelines that curbed prosecutions of businesses that sold pot in compliance with state law.
With support from both President Donald Trump and Democrat Senator Elizabeth Warren, Politico reported that the leading banking industry associations are urging lawmakers to make it easier for banks to serve pot companies in states where cannabis is legal, including California and Colorado.
The report noted that Federal Reserve Chairman Jerome Powell supports the initiative, saying at a press conference last week that while it’s a “difficult area,” it would be “great if that could be clarified.”
Seeing the opportunity for big business in serving the pot industry, lenders are backing legislation that would address the federal ban on the sale of marijuana that has prevented banks from getting into the market for fear of running afoul of laws. With Sessions publicly going after the legalized pot industry, trade groups have been increasing their lobbying efforts.
Politico pointed to the American Bankers Association (ABA), which said it thinks “the time has come for Congress and the regulatory agencies to provide greater legal clarity to the banks operating in states where marijuana has been legalized for medical or adult use,” a spokesman said. The ABA, which has thousands of large and small banks as members, added that banks that have no interest in dealing directly with pot companies are facing increased regulatory risk and uncertainty as the marijuana industry increases.
Meanwhile, the Independent Community Bankers Association of America (ICBA), which represents small lenders around the country, endorsed a pot banking bill that would prevent the federal government from penalizing banks that provide services to the pot industry. The bill, presented by Democrat Reps. Ed Perlmutter of Colorado and Denny Heck of Washington has the backing of 90 lawmakers, including 13 Republicans.