Waters’ House panel marks up CFPB, cannabis banking bills March 26

Two financial services bills – one targeting the consumer financial protection agency, the other addressing services to legitimate marijuana businesses – are slated for mark-up next Tuesday by the House Financial Services Committee, panel Chairwoman Maxine Waters (D-Calif.) announced.

The Consumers First Act (H.R. 1500), as released in draft form earlier this month, would reverse Consumer Financial Protection Bureau (CFPB) actions carried out under the direction of “acting” director John (“Mick”) Mulvaney with respect to the bureau’s staffing, funding, operations, supervision, advisory councils, and more. The Secure and Fair Enforcement Banking Act (SAFE Banking Act), also as drafted, would give legal cannabis-related businesses access to financial institution services and exempt from federal prosecution (or investigation) financial institutions and employees solely for providing services to state-authorized cannabis-related businesses.

Created by Waters and having 29 cosponsors, the draft Consumers First Act expressed the “sense of the Congress” that the bureau “should meet its statutory purpose in a transparent and accountable manner by operating in a way that is consistent with both the spirit and plain letter of the law.” It said the agency’s mandate should also be apparent by its name, referring to Mulvaney’s decision to change the agency’s name to “Bureau of Consumer Financial Protection” as an apparent effort to deemphasize the bureau’s “core mandate” to enforce federal consumer financial law.

The measure offers a point-by-point repudiation of actions taken by the bureau at Mulvaney’s direction in areas such as fair lending enforcement, the publicly available consumer complaint database, pending legal actions against payday lenders, focus on rules’ impact on providers vs. consumers, and more. It would set stricter parameters for the appointment of members to the Consumer Advisory Board (CAB), requiring the CFPB director to appoint no fewer than 25 members to CAB (six of those, as provided before, selected at the recommendation of the Federal Reserve Bank presidents) and would reinstate those removed last year.

The SAFE Banking Act, introduced by Rep. Ed Perlmutter (D-Colo.) and having Reps. Denny Heck (D-Wash.), Steve Stivers (R-Ohio), and Warren Davidson (R-Ohio) among its 138 cosponsors, would give legal cannabis-related businesses access to financial institution services and exempt from federal prosecution (or investigation) financial institutions and employees solely for providing services to state-authorized cannabis-related businesses.

The bill is intended to “harmonize federal and state law concerning cannabis-related businesses and allow these businesses access to banking services,” according to the draft. It would bar federal financial institution regulators from taking several actions against financial institutions serving legal cannabis-related businesses, including:

  • Terminating or limiting deposit insurance at a bank or credit union “solely because the depository institution provides or has provided financial services to a cannabis-related legitimate business”;
  • Prohibiting, penalizing, or discouraging a bank or credit union from providing financial services to a cannabis-related legitimate business or to a state (and its political subdivisions, Indian Tribe) that exercises jurisdiction over cannabis-related legitimate businesses;
  • Encouraging (in any way) a bank or credit union not to offer or to downgrade financial services to account holders solely because they own or become an owner of a cannabis-related legitimate business;
  • Taking any “adverse or corrective supervisory action on a loan made to an owner or operator” of a cannabis-related legitimate business or for real estate or equipment leased to that business.

The Consumers First Act and SAFE Banking Act are among six measures slated for Tuesday’s mark-up; mark-up begins at 2 p.m.

Chairwoman Waters Announces Updates to March Committee Schedule

RR: ‘Consumers First Act,’ a topic of Thursday’s CFPB oversight hearing, would reverse Mulvaney actions (March 5, 2019)

RR: Panel discusses bill barring regulators from actions against banks serving cannabis-related legit businesses (Feb. 13, 2019)

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