House Panel Approves Marijuana Banking, Anti-Mulvaney CFPB Bills

The House Financial Services Committee on Thursday approved legislation that would make it easier for marijuana-related businesses to obtain financial services.

The panel, ending a markup of more than 12 hours spread over three days, also approved a measure that would undo many of former CFPB Acting Director Mick Mulvaney’s decisions at the agency.

Voting 45-15, the committee approved the marijuana legislation, H.R. 1595, with several panel Republicans voting with the Democratic majority to send the legislation to the full House.

The panel’s vote marks the first time a congressional committee has approved the bill, sponsored by Democratic Reps. Ed Perlmutter of Colorado and Denny Heck of Washington.

Committee Chairwoman Maxine Waters (D-Calif.) noted the six-year effort by Perlmutter to enact the legislation.

“Mr. Perlmutter may now take his victory dance up and down the aisles,” she said.

Under current law, because cannabis is considered illegal under the federal Controlled Substances Act, financial institutions providing services to licensed marijuana businesses are subject to criminal prosecution or sanctions by their regulators.

As a result, some cannabis-related services, many of which are cash businesses, cannot be provided with traditional banking services.

“Huge piles of cash are produced by these businesses,” Perlmutter said, adding, “It is our job to address this and not ignore it.”

But Rep. Blaine Luetkemeyer (R-Mo.) said that marijuana is still illegal under federal law, adding that the logical first step would be to change the Controlled Substances Act.

He said that bill supporters are “putting the cart before the horse.”

However, Rep. Steve Stivers of Ohio, one of the Republican supporters of the bill said that the measure simply deals with extending financial services to the businesses, adding that other issues, such as the Control Substances Act are not within the committee’s jurisdiction

“This bill is a very narrowly constructed piece of legislation dealing with the financial services industry,” Perlmutter said.

Financial Services ranking Republican Patrick McHenry of North Carolina lamented the fact that the panel only held one hearing on the issue, adding that many questions about the bill remain unanswered.

CUNA President/CEO Jim Nussle hailed approval of the legislation.

“Regardless of one’s feeling of legalization or decriminalization of cannabis, CUNA and others have demonstrated that the current status quo for these businesses is a public safety concern and will remain so if these businesses cannot access mainstream financial services,” he said.

NAFCU has not endorsed the measure.

“Although NAFCU has not endorsed a specific legislative proposal, we do support Congress examining what legislative steps can be taken to provide greater clarity and legal certainty at the federal level for credit unions that choose to provide financial services to state-authorized MRBs and ancillary businesses in states where such activity is legal,” the trade group said, in a policy brief issued this week.

Also, during the markup, the committee approved Waters’s legislation to reverse many of the decisions that former CFPB Acting Director Mick Mulvaney made while running the agency.

The committee approved that bill, H.R. 1500 by a 34-26 vote.

The bill would, among other things, restrict the reorganization of bureau units, board and offices, limit the hiring of political appointees, ensure that the agency consumer complaint database remains public and formally establish offices of Fair Lending and Equal Opportunity and Students and Young Consumers.

Waters said that Mulvaney worked to take the agency apart from the inside, adding that she is worried that permanent CFPB Director Kathy Kraninger will continue Mulvaney’s plans.

“I’m concerned that she might follow Mulvaney’s lead unless Congress sends a clear message,” she said.

However, Rep. Roger Williams (R-Tx.) said a lengthy preamble to the bill specifically attacks Mulvaney, adding that the bill “slanders one of my good friends.”

Democrats defeated several amendments to the bill, including one that would have transformed the agency into a five-member commission.

CUNA and NAFCU have endorsed that idea.