New Chairman of Subcommittee on Financial Institutions Supports Cannabis Banking

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In an announcement from Patrick McHenry (R-NC), the Chairman of the House Financial Services Committee, a new chairman for the newly renamed Subcommittee on Financial Institutions and Monetary Policy was shared.

Representative Andy Barr, a Republican from Kentucky’s 6th district, was chosen to lead the subcommittee, which was previously known as the Subcommittee on Consumer Protection and Financial Institutions.

The name change may represent posturing on the side of Committee Republicans who have recently taken heavy aim at the Consumer Financial Protection Bureau, which the Subcommittee on Financial Institutions and Monetary Policy will continue to govern. As recently as December, Rep. McHenry made remarks to CFPB Director Rohit Chopra chastising him for the bureau’s lack of transparency and warning him of changes to come in the new year: “I think you’ll wish you tried harder to play by the rules.”

As Chairman of the Subcommittee on Financial Institutions and Monetary Policy, Barr’s jurisdiction will extend to oversight of financial regulators, including the NCUA, the CFPB, and the Federal Reserve. Said Barr of the appointment, “I also look forward to exercising much needed oversight of other key financial regulators, including the OCC, FDIC, NCUA, CFPB and FSOC, to ensure that both financial institutions and their regulators are facilitating a safe, sound, diverse and accessible financial ecosystem that fosters growth and competition.”

Barr and field of membership expansion

Last year, Barr opposed the Expanding Financial Access for Underserved Communities Act, which was proposed by Rep. Maxine Waters, (D-CA). The legislation’s goal was to allow credit unions to expand their fields of membership to underserved communities, combatting “banking deserts” created by vacating banks and other financial institutions.

Bankers were quick to oppose the legislation, citing an unfair playing field on credit unions’ behalf. Waters acknowledged their complaints, but said the legislation does nothing to prevent banks from reopening branches in underserved areas; rather, she encouraged them to do so. “This bill is not about favoring credit unions over banks,” said Waters, “This is about expanding access and opportunity for those who are not being appropriately served by any financial institutions.”

Barr voiced support for the goal, but was critical of the legislation’s structure, which he claimed did not include ways of governing whether credit unions that move into underserved areas actually would serve low- and moderate-income families. A complaint similar to more hardline opponents who warned large credit unions would move into underserved communities and cherry-pick who they served.

Instead, Barr urged legislators to support his own measure aimed at encouraging and supporting de novo charters in areas without adequate banking services. He also voiced that all financial institutions should be united in providing financial services to those communities.

Barr and cannabis banking

In 2019, Barr added amendments to the Secure and Fair Enforcement (SAFE) Banking Act that would extend the safe-harbors provided to cannabis businesses to hemp and CBD businesses as well.

“While banks and credit unions want to serve these businesses, they often have concerns about possible legal implications,” Barr said. “My provisions will give financial institutions the confidence they need to provide services to hemp-related businesses. These provisions provide much-needed clarification for financial services companies looking to enter the hemp market, and provide hemp businesses with access to capital, credit and payment services.”

Although legislation related to cannabis banking and similar businesses has met with roadblocks, Barr’s appointment provides credit unions with support in this area moving forward. CUNA and NAFCU helped support Barr’s reelection efforts financially through their political action committees.

Author

  • Esteban Camargo

    As a supervising editor of CUSO Magazine, Esteban reviews and edits submissions, assists in the development of the publishing calendar, and performs his own research and writing. His experience provides CUSO Mag with a seasoned writer and content curator, able to provide valuable input to contributors, correspondents, and freelance journalists. Esteban has worked at CU*Answers since 2008 and currently serves as the CUSO's content marketing manager.

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