U.S. Sen. Mike Crapo, R-Idaho, held a full hearing in the Senate Banking Committee on Tuesday on legislation to allow banks to serve marijuana businesses that are legal in their states, dousing widespread national speculation that Crapo would block the bill because he personally opposes legalization of marijuana.
However, Crapo was the only Republican member of the committee to attend the hourlong hearing.
“The message is he’s willing to hold a hearing and get the issue up for discussion,” said Lindsay Nothern, Crapo’s spokesman. “Holding a hearing doesn’t equal support, because of the situation in Idaho,” where all forms of cannabis remain illegal, including non-psychoactive industrial hemp. Idaho is one of just three states with no legal form of cannabis; the other two are Nebraska and South Dakota.
Sens. Cory Gardner, R-Colorado, and Jeff Merkley, D-Oregon, are co-sponsoring bipartisan legislation called the “SAFE Banking Act of 2019” to allow banks to legally serve marijuana businesses in states where they’re legal; currently, credit unions, which are state-chartered, can do so, but banks, which are federally chartered, cannot, because marijuana remains illegal under federal law. That’s resulted in cannabis businesses often operating on a cash-only basis, which Gardner said has created “a genuine public safety problem.”
Crapo told the hearing that the Gardner-Merkley legislation “attempts to ease some of the difficulties resulting from marijuana’s illegal federal status and more lenient state laws.”
He also returned to a point he pressed under the Obama Administration, when Crapo vehemently opposed the administration’s efforts to pressure banks to cut off services to what Crapo called “politically disfavored industries” including firearms businesses and payday lenders.
“Business lending decisions should be based on creditworthiness, rather than politics or political pressure,” Crapo said in March, after he sent letters to eight major bank CEO’s urging them not to restrict their services.
Merkley told the hearing, “We have a fundamental conflict regarding state’s rights and federal rights. Our basic argument is let’s stand with state’s rights … and not proceed to create a federal chaos that is good for money laundering and is good for organized crime and is good for robbery and is good for cheating on your taxes and is good for cheating on your payroll, but it’s not good for the citizens.”
Gardner said he opposed legalization of recreational marijuana in his home state, but said, “In Colorado, the sky has not fallen.”
“The vast majority of states have changed their laws; 47 states now allow some form of cannabis,” Gardner said, which leaves “more than 95% of our population living in a state with some form of legalized cannabis.It’s happening in the bluest of blue states, the reddest of reds, and in Colorado, the purplest of purples.”
“The cannabis issue is not going to go away, and we must have action,” Gardner declared. “There’s been a dramatic shift in Americans’ views of cannabis in recent years. Polling shows that about 65% of Americans support legalization of marijuana. Ninety-three percent of the American public support medical marijuana. … At a time when all the talk is about how divided we are in the country, we are remarkably united on this issue.”
Nothern said he took issue with national media speculation that Crapo would block the bill due to his personal views on marijuana. “If we were trying to block it, we wouldn’t have any hearings on it,” Nothern said. “Could there be a vote at some point? Sure, there could.”
However, Nothern noted that in addition to the Banking Committee, the Senate Judiciary Committee likely would have to sign off on any federal law change legalizing banking services to cannabis businesses. That panel is chaired by Sen. Lindsey Graham, R-South Carolina, an opponent of recreational marijuana.
“Sen. Crapo held the hearing. People can read into that what they will,” Nothern said Wednesday. “He made it clear in the hearing that he doesn’t support personally the legalization of marijuana because that’s a decision of his state. But … he supported having a hearing on that legislation.”
“It’s basically a nod to what these senators in the other states, Colorado and Oregon, are trying to accomplish,” Nothern said. “Also in the interest of bipartisanship and working with our colleagues in the Senate, he agreed to hold a hearing.”