Federal Marijuana Prohibition Poses Banking Dilemma, Biden Official Urges Congressional Action

A senior official in the Biden administration has underscored the significant challenges faced by banks due to ongoing federal prohibition. The official emphasized the importance of Congress passing reform legislation to address this issue.

During a hearing at the House Appropriations Financial Services and General Government Subcommittee on Thursday, Representative Dave Joyce (R-OH) raised concerns about the regulatory complexities arising from the conflict between federal and state marijuana policies. Treasury Secretary Janet Yellen was asked to provide insights into the administration's stance on the Secure and Fair Enforcement Regulation (SAFER) Banking Act, a bipartisan bill aimed at resolving banking issues related to the cannabis industry.

Yellen expressed openness to legislation that would clarify banks' responsibilities concerning cannabis businesses, noting that the federal ban on marijuana hinders banks' willingness to provide services to such firms. She emphasized the necessity of legislative action to alleviate banks' concerns and ensure the smooth functioning of the cannabis industry.

Echoing Joyce's sentiments, Representative Steny Hoyer (D-MD) stressed the urgency of resolving the banking problem, highlighting the risks posed by the current situation, including vulnerabilities to crime and challenges for legitimate businesses. Hoyer lamented the Senate's delay in passing legislation already approved by the House to address this issue.

The Senate Banking Committee endorsed the SAFER Banking Act last September, but its progress has stalled pending floor action. Hoyer reiterated the need for swift action to protect businesses and promote public safety.

Yellen's frustrations with the barriers to financial services for the marijuana industry under federal prohibition have been longstanding. She has previously expressed disappointment over Congress's failure to enact banking reform legislation and has advocated for solutions to address these challenges.

While discussions on marijuana banking legislation continue in Congress, Senate Majority Leader Chuck Schumer has reaffirmed his commitment to prioritizing the SAFER Banking Act. Despite political complexities, bipartisan efforts persist to address the banking dilemma faced by the cannabis industry.

This story was originally covered by Marijuana Moment.