Senate passage of defense legislation could have wide-ranging impact on credit union industry.
While the House last week passed an FY23 defense authorization bill that includes marijuana banking and several other financial services provisions, it remains unclear if the Senate will accept any of them or if they will survive in conference.
The House last week slogged through the massive defense bill—considering hundreds of amendments, many of which were accepted en bloc, with little or no debate. The Senate Armed Services Committee has not yet released the text of its bill and it is unclear when it will go to the Senate floor.
The bill once again includes Rep. Ed Perlmutter’s, D-Colo., amendment that would provide credit unions and banks with a regulatory safe harbor if they serve marijuana-related businesses in states where cannabis is legal.
Perlmutter last year succeeded in getting the marijuana banking plan in the FY22 defense bill, but the Senate did not accept it in conference. Senate Majority Leader Charles Schumer, D-N.Y., has said he wants to consider marijuana banking as part of a more comprehensive cannabis measure.
“It’s time to get this done—and I will pursue any and all legislative avenues to do so,” Perlmutter said, following House passage of the defense bill. The congressman is retiring from the House at the end of the year.
Perlmutter tied the marijuana provisions specifically to the defense bills, noting that several veterans’ organizations have endorsed his plan.
“This is yet another opportunity for the Senate to advance common sense cannabis reforms starting with access to the banking system,” he stated. “I’m calling on them to take action for the safety of our communities and success of Veteran- and minority-owned businesses across the country.”
Financial services trade groups, including those representing credit unions, have endorsed Perlmutter’s plan.
Other Amendments Impacting Credit Unions
The defense bill passed by the House includes several other proposals affecting credit unions, including amendments that would:
–Provide the National Credit Union Administration (NCUA) with the power to oversee third party vendors working for credit unions. Members of the agency’s board, the NCUA’s Inspector General and the Financial Stability Oversight Council have called for granting the agency that power. However, credit union trade groups oppose the plan, contending that it would create an unnecessary regulatory burden.
–Extend pandemic-related changes to the NCUA’s Central Liquidity Facility.
–Establish a grant program for states, nonprofit organizations, and higher education institutions to promote diversity in the appraisal industry. A separate amendment would change the licensing requirements for appraisers.
No Updates to Military Base Rent Benefits
The bill does not include any changes to the free rent status that credit unions now receive on military installations. Banking trade groups have been lobbying for several years to convince the Pentagon to provide banks with the same benefits.
The House version of last year’s defense bill called for a study of the issue, but that study has not been released.