Update from Washington, D.C.
House Approves Bipartisan Cannabis Banking Legislation, Stopgap Funding Measure; Comments on SNAP/CalFresh Rule
September 26, 2019
House Approves Bipartisan Cannabis Banking Legislation
In a historic vote, the House on September 25 overwhelmingly approved cannabis banking legislation – the SAFE Banking Act (HR 1595) – that would help improve access to financial services for state-legal businesses, as well as the ancillary businesses that provide them with goods and services. The legislation, which CSAC has endorsed, would exempt depository institutions and their employees from federal prosecution or investigation solely for providing banking services to a state-legal cannabis-related business. This so-called “safe harbor” is intended to provide certainty for financial institutions to offer their products and services without fear of retribution from the federal government.
In an effort to broaden its appeal to GOP members, HR 1595 was amended prior to its consideration to clarify that the safe harbor protections would also extend to hemp and cannabidiol (CBD) companies. In addition, the measure would prevent financial regulators from unfairly targeting certain industries (such as firearms dealers and payday lenders) as a higher risk for fraud. In the end, all but one Democrat supported the bill, while the Republican vote was virtually split.
Looking ahead, it remains unclear whether similar legislation will advance in the GOP-controlled Senate. For his part, Majority Leader Mitch McConnell (R-KY) has continued to express his opposition to any type of legislation that normalizes cannabis use. However, Senate Banking Committee Chairman Mike Crapo (R-ID) has recently shown a willingness to tackle the banking issue, despite his opposition to legalization. In fact, his panel held a hearing in July to discuss the challenges that state-legal cannabis businesses face when attempting to access traditional banking services. Following the hearing, Crapo acknowledged that a strong case was made for approving safe harbor legislation, although he also indicated that it’s a complex issue that Congress needs to get right.
Senate Approves Stopgap Funding Measure; Committee Advances Four FY20 Spending Bills
Earlier today, the Senate approved a House-passed Continuing Resolution (CR) that will fund the federal government into the new fiscal year that begins on October 1. The legislation (HR 4378) will provide flat funding to agencies through November 21, giving lawmakers an additional two months to negotiate fiscal year 2020 spending levels.
To date, Congress has yet to advance any of the 12 annual appropriations bills. However, with a budgetary framework now in place, congressional leaders have expressed cautious optimism that they will be able to compromise on individual funding measures before the Thanksgiving holiday.
At the committee level, Senate appropriators continued to make progress on the fiscal year 2020 budget, voting on September 26 to advance five funding bills – Commerce-Justice-Science (CJS), Homeland Security (DHS), Interior-Environment, State-Foreign Operations, and Legislative Branch. While the committee has now approved all 12 spending bills for the new fiscal year, there are still a number of outstanding partisan disagreements to work out, particularly over funding allocations and policy riders.
CSAC Comments on SNAP/CalFresh Rule
Earlier this week, CSAC submitted comments to the U.S. Department of Agriculture (USDA) opposing the agency’s recent proposal to restrict automatic eligibility requirements for SNAP/CalFresh. Under current law, states can automatically deem people eligible for SNAP if they qualify for similar federal benefits, such as the Temporary Assistance for Needy Families (TANF) program. This administrative flexibility is currently used by more than forty states to streamline eligibility determinations.
The administration’s proposed rule, which was published on July 24, would limit categorical eligibility to only those beneficiaries who receive “ongoing and substantial benefits” from TANF. Specifically, a household would have to receive a TANF benefit of at least $50 per month for a minimum of six months to qualify for automatic SNAP eligibility. According to USDA’s own estimates, if the rule is ultimately finalized, it could push more than 3.1 million individuals off the SNAP program, and approximately 500,000 children would no longer receive free school meals.
It should be noted that CSAC worked in conjunction with the County Welfare Directors Association of California to submit the comments prior to the September 23 deadline. In all, USDA has received more than 75,000 comments, the vast majority of which are in opposition to the proposed changes.