WASHINGTON -- The U.S. House Financial Services Committee on Thursday approved a bill co-authored by U.S. Rep. Ed Perlmutter of Colorado that would authorize marijuana-related businesses to open bank accounts and obtain lines of credit.
The accounts would be allowed only in states that legalize marijuana sales, such as Colorado.
Current financial regulations deny access to the banking system for marijuana businesses because it is an illegal drug under federal law.
The bill, called the Secure and Fair Enforcement (SAFE) Banking Act, was co-authored by Perlmutter, an Arvada Democrat.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights,” Perlmutter said.
Supporters say the bill would help the businesses grow and reduce crime associated with their cash transactions. The alleged crimes have included money laundering, tax fraud and attacks on marijuana business owners believed to be carrying cash.
Allowing the business access to banks, along with the laws that regulate them, would “improve transparency and accountability and help root out illegal transactions,” Perlmutter said. “Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer.”
The bill, H.R. 1595, had 152 cosponsors in the House of Representatives by the time of the committee’s 45-to-15 vote Thursday.
One of them was Rep. Earl Blumenauer, an Oregon Democrat, who tweeted: “Outstanding! This is an important first step in the blueprint to legalization.”
Colorado is one of nine states that have legalized both recreational and medicinal use and sales of marijuana. Forty-seven states allow at least limited use of marijuana.
The bill next moves to a vote on the floor of the House. A Senate companion bill is expected to be introduced within weeks.
An amendment in the bill extends the shield from regulatory penalties for serving marijuana businesses beyond banks and credit unions to include insurance companies.
Republicans generally opposed the legislation, saying Congress needs to consider a broader issue of whether marijuana should be legalized before thinking about bank access.
They were joined in their opposition by the public policy group SAM Action, which opposes marijuana legalization as a health and safety threat. The acronym SAM stands for Smart Approaches to Marijuana.
“This bill is nothing more than a backdoor attempt at legalizing marijuana,” said SAM Action President Kevin Sabet. “Moreover, allowing banking access to the marijuana industry would open up direct access to Wall Street investment into the sale and marketing of highly potent pot candies, cookies, sodas and ice creams. With this obstacle out of its way, there will be little left to stop the industry from metastasizing into the next Big Tobacco.”
Some Republicans tried to push through amendments to the bill that would modify the safe harbor regulatory protections for banks. Perlmutter and other Democrats blocked all but three amendments.
Perlmutter, who also is a member of the House Rules Committee, said he was willing to negotiate possible amendments to help the bill’s chances for success when it moves to a vote on the House floor.
One of Perlmutter’s own amendments would require the federal government to study whether minorities and women are represented fairly in the marijuana industry. The amendment was a response to advocates of legalization outraged by the extent the war on drugs of previous years fell heavily on racial minorities.
The amendment would require bank regulators to publish annual reports with "information and data on the availability of access to financial services for minority-owned and women-owned cannabis-related legitimate businesses" and to make “regulatory or legislative recommendations for expanding access to financial services” for those groups.
An amendment from U.S. Rep. Scott Tipton, R-Cortez, seeks to determine whether the legislation helps to reduce suspicious transactions associated with marijuana businesses.
It would require the Government Accountability Office to examine reports that banks are required to file on marijuana business clients to determine whether they effectively identify customers involved in illegal activity.
Tipton withdrew one of his other amendments before the vote that sought to ensure organized crime networks could not take advantage of the bill’s authorization for banking services.