Why Do Legalizers Keep Blocking Pot Banking?
Chuck Schumer claims to favor repealing the federal ban on marijuana. So why did he sink legislation that would have removed federal obstacles to banking services for pot businesses?
Senate Majority Leader Chuck Schumer claims to favor repealing the federal ban on marijuana. The New York Democrat nevertheless helped sink legislation that would have removed federal obstacles to banking services for state-licensed marijuana businesses.
Even stranger, the Drug Policy Alliance (DPA), which has long supported marijuana legalization, joined Schumer in demanding that the Secure and Fair Enforcement (SAFE) Banking Act be excised from the National Defense Authorization Act for fiscal year 2022, which President Joe Biden signed into law on December 27. "We have less than 72 hours to keep the SAFE Banking Act OUT of this omnibus bill," Maritza Perez, the DPA's director of national affairs, warned in a December 3 "urgent action" alert, "and the only way to stop it is if advocates like you speak up right away."
Schumer insisted that a legalization bill he planned to introduce in April take precedence over piecemeal reforms. The DPA likewise worried that passing the SAFE Banking Act would relieve pressure for broader changes. "Don't Let Congress Prioritize Marijuana Profits Over People," it said.
The SAFE Banking Act, which Rep. Ed Perlmutter (D–Colo.) reintroduced in March 2021, would protect financial institutions that serve "cannabis-related legitimate businesses" from criminal prosecution, regulatory penalties, and civil forfeiture. It passed the House in April 2021 by a 3-to-1 margin with support from 106 Republicans. An amendment adding it to the must-pass defense bill was approved by a voice vote in September. But Schumer made sure Perlmutter's legislation was not included in the final version of the bill.
This was the fifth time the House had approved cannabis banking legislation, and its supporters were dismayed at Schumer's obstruction. "I don't really quite know what the hell his problem is," House Rules Committee Chairman Jim McGovern (D–Mass.) said during a committee meeting. McGovern complained that Schumer is "making it very difficult for a lot of small businesses" to "expand and hire more people."
A lack of financial services forces many marijuana businesses to rely heavily on cash, which increases the risk of theft and robbery. "People are still getting killed and businesses are still getting robbed because of a lack of action from the Senate," Perlmutter said in a press release.
Ethan Nadelmann, who founded what became the DPA in 1994 and ran the organization for 23 years, questioned its current strategy in an October interview with Reason's Nick Gillespie. "Holding off on doing the incremental stuff, like safe banking, until we get the broader legalization, when we know broader legalization is not gonna happen for years," Nadelmann warned, "may well not work on Capitol Hill."