Marking one year since a Senate committee passed the bipartisan cannabis banking bill, the Congressional Budget Office (CBO) has announced the economic impact of the reform, including the potential for billions of dollars in increased federally insured deposits from cannabis businesses. We published an analysis on When banks receive protection for their services to the industry, they earn a few dollars in profits.
The Senate Banking Committee approved the Secure and Fair Enforcement Regulation (SAFER) Banking Act last September, but competing legislative priorities and disagreements among members on certain components of the proposal persist. So far, no action has taken place in the chamber. Stakeholders hope that the release of the CBO scores will help pave the way for debate on the floor.
CBO will consider this bill from multiple angles, and will consider the potential of various federal agencies, including the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), the Financial Crimes Enforcement Network (FinCEN), and members of the National Security Agency. Costs and savings were evaluated. the Federal Financial Institutions Examination Council (FFIEC), which includes the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA);
CBO said it expects direct spending to be affected in three key ways if the SAFER Banking Act is enacted. For example, mortgage programs are likely to be affected by “increases in the amount of federal housing programs issuing or guaranteeing mortgage loans,” bank deposits insured by the FDIC and NCUA are likely to increase, and bank deposits insured by the FDIC and NCUA are likely to increase by “additional There may be an increase in administrative costs due to expenditures on Requirements for government agencies whose costs are classified as direct expenditures. ”
Overall, “CBO estimates that this bill, if enacted, would increase net direct spending by $63 million over the period 2024 to 2034,” the report states.
The agency said it expects bank insured deposits to increase by about $1.5 billion and credit union deposits to increase by $125 million in 2026, assuming the bill passes this year. . respectively by 2034. ”
Based on these deposit increases, the CBO expects direct spending to increase by $7 million “to resolve the possibility of future bank failures,” but that’s less than “FDIC (insurance premiums) and NCUA (capital deposits).” ) will be offset by $16 million in taxes.” ). ”
“Accordingly, CBO estimates that enactment of S. 2860 will reduce net direct spending for the FDIC and NCUA by $9 million over the 2024-2034 period.”
Additionally, this score indicates that if the SAFER Banking Act passes, the number of FHA-insured loans will increase by 3,600 per year as the bill adds protections that clarify cannabis business worker eligibility for housing programs. The CBO says it expects. However, the costs paid to mortgage lenders will be offset by interest income on those loans, resulting in a $147 million reduction in expenses over the 2024-2029 period.
VA loan guarantees will be worth an estimated $450 a year from 2024 to 2034, an increase of 950, the agency said. For government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, the company expects the number of loans it provides to increase by “approximately 350 over the same period, increasing loan amounts by $150 million annually.” .
“Based on this, CBO estimates that enactment of S. 2860 would increase VA direct spending by $56 million and GSE direct spending by $13 million over the period 2024-2034.” I am.
The report also notes continued “uncertainty” as far as the economic impact of the SAFER Banking Act is concerned, including questions about whether the guidance agencies will be required to issue “will be more or less stringent than current guidance.” We have identified several areas where there is “sexuality”. This could affect the willingness of financial institutions to accept customers for marijuana businesses.
“CBO estimates that enacting S.2860 would not increase net direct spending by more than $2.5 billion in any four consecutive years beginning in 2035,” the report said. states. “CBO estimates that enacting S. 2860 will not increase the budget deficit by more than $5 billion over any four consecutive 10-year period beginning in 2035.”
CBO also evaluated an earlier version of the marijuana banking bill that passed a House committee in 2019 and determined that the federal government ultimately stands to save money if the reforms pass.
But as lawmakers work to keep the government funded amid a contentious presidential election and time is running out with the remainder of the session, the SAFER Banking Act is expected to be passed by the end of the year. remains unclear.
The bill’s Democratic Senate sponsor, Sen. Jeff Merkley (D-Ore.), told Marijuana Moment last week that former President Donald Trump, a 2024 Republican candidate, expressed support for the marijuana bill. He said it was “awesome” and “useful.” Reform, but he similarly said the path to passage through the chamber remains unclear.
Meanwhile, Sen. Elizabeth Warren (D-Mass.) and Sen. Tommy Tuberville (R-Ala.) said Republican support for the SAFER Banking Act was enough to pass on the Senate floor during the post-election lame-duck session. separately challenged the idea that there is.
Warren has accused some Republicans of exaggerating their support for the bill within their caucus, while Trump, who has expressed support for the presidential election and is trying to change policy, is in office. He denounced “inaction” on cannabis reform. Marijuana banking bill and federal schedule changes.
Sen. John Hickenlooper (D-Colo.) also recently said in an interview with Marijuana Moment that the main barrier to getting a marijuana banking bill across the finish line is the lack of enough Republican support in the chamber. He insisted that this was what he was doing. He said if he was serious about passing the reforms that President Trump recently supported, he needed to “bring in some Republican senators.”
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Senate Banking Committee Chairman Sherrod Brown (D-Ohio) also recently reiterated the need to promote the SAFER Banking Act as a public safety imperative and advocated for the law in a video touring cannabis businesses in Ohio. promoted. In a recent interview with Marijuana Moment, he also said, “We don’t have enough Republicans, we don’t think so.”
Many are hoping for a Senate roll call vote on the bill before the end of this Congress — at least to see if there is enough support for the bill to reach the lofty 60-vote threshold. Lawmakers are forced to go on the record amid conflicting reports about the incident. Proceed to the passage. But some feel that if they fail, the setback could do even more damage to their prospects for long-term success.
Separately, Rep. Earl Blumenauer (D-Ore.), co-chair of the Congressional Cannabis Caucus, said in a letter to House Speaker Mike Johnson (R-Louisiana) that the cannabis banking bill is an example of a measure that should be submitted to Congress, he said. Trump’s statement was immediately followed by a debate on the floor, as well as recent reports about unearthed audio of former President Richard Nixon admitting that marijuana is “not particularly dangerous.”
“Rather than further dividing us, I propose advancing policies that make a difference for the American people, including our veterans, law enforcement, small businesses, and more,” he said at the end of this Congress. The retiring lawmaker said: Said. “It’s never too late to do the right thing.”
However, it remains to be seen whether Prime Minister Boris Johnson will accept the MP’s advice. Before becoming chairman, Mr Johnson consistently opposed cannabis reform, including on incremental issues such as cannabis banking and making it easier to carry out scientific research on cannabis plants.
Kamala Harris becomes first Democratic presidential candidate to say marijuana “needs to be legalized”
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