Mnuchin Won’t Defend CDFI Cuts, Declines to Address Marijuana Banking
The Treasury Secretary urges Congress to decide on the marijuana banking issue one way or another.
Given the opportunity Wednesday, Treasury Secretary Steven Mnuchin declined to defend the Trump Administration plan to eliminate the Community Development Financial Institutions program.
“I acknowledge that the CDFI [program] provides significant benefits to many communities,” Mnuchin told the House Appropriations Financial Services subcommittee.
Asked if the administration would object to a continuation of the CDFI program, Mnuchin said, “We would not object.”
Mnuchin also declined to take a position on whether Congress should enact legislation to provide financial institutions with a safe harbor to provide services to marijuana-related businesses.
In each budget, the Trump Administration has proposed eliminating the CDFI program, saying there was sufficient private capital to fill in the gaps that elimination would cause.
This year, the program received a $12 million increase, in the end-of-year spending deal enacted in December.
Last year, Mnuchin told the same subcommittee that the administration had not conducted research into the program’s impact.
The Trump budget released last month did not cite new research.
Instead, the budget stated the administration “proposes to eliminate funding for the Fund’s four discretionary grant and direct loan programs because continued over-reliance on Federal funds hinders long-run sustainability of this now mature industry.”
On marijuana, Mnuchin said he would not take a position on House-passed legislation to provide a safe harbor to financial institutions serving cannabis-related businesses. That legislation faces an uncertain future in the Senate.
Mnuchin said he has limited power over the prudential financial regulators. He urged Congress to decide the issue one way or another.
He did add, however, that the issue has caused some problems with the IRS. He said that marijuana businesses deal in all cash, adding that the IRS has had to create “cash rooms” to handle tax payments made in cash.
He said that creates some risk for IRS employees handling large amounts of cash.
“This creates significant problems for the IRS,” he added.