Legislation could open door for some credit unions and banks to serve marijuana-related businesses.
The long-awaited Senate Democratic marijuana legislation would allow marijuana banking and would establish a new Community Development Financial Institution (CDFI) program to provide grants to communities that have been impacted by the War on Drugs.
The legislation would decriminalize cannabis from the Controlled Substances Act, empowering states to create their own marijuana laws. Supporters said that would allow credit unions and banks to provide financial services to marijuana-related businesses without the fear of regulatory sanctions.
Senate Majority Leader Charles Schumer, D-N.Y., and four Democratic senators introduced the legislation Thursday.
“It is time that Congress catches up to the rest of the country,” Schumer stated on the Senate floor.
Impact on CDFI and MDI Programs
The Senate bill also would provide grants to CDFIs and Minority Depository Institutions (MDIs) to expand lending in low- and moderate-income areas. The bill would provide $200 million each year for the CDFI and MDI programs through Treasury Department funds that are not otherwise appropriated.
“By failing to act, the federal government is empowering the illicit cannabis market, it’s ruining lives and propping up deeply rooted racism in our criminal justice system, it’s holding back small cannabis businesses from growing and creating jobs in their communities,” Senate Finance Committee Chairman Sen. Ron Wyden, D-Ore., one of the cosponsors, said Thursday. “Cannabis legalization is here, and Congress needs to get with the program.”
Hurdles to Passage Remain
A comprehensive marijuana bill may be difficult to pass this year. The House several times has passed a smaller marijuana banking bill that supporters say would allow credit unions and banks to provide financial services to marijuana-related business.
The House included that plan as part of the FY23 defense authorization legislation, however the Senate version of the defense bill does not include the banking provision.
Rep. Ed Perlmutter, D-Colo., the main sponsor of the marijuana plan, has vowed to try to attach the legislation to any available legislative vehicle.
Schumer and others have said that the banking provisions should not be enacted separately but should be addressed in a comprehensive bill.
Any marijuana bill is likely to need 60 votes in the Senate, and with some Republicans opposing marijuana legislation, Schumer may not currently have the necessary votes.
Perhaps in acknowledgement of this, he appeared on Thursday willing to cut a deal on the bill.
“This is the beginning of the legislative process,” he said in his floor speech. “It is not the end.”