Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Senate Banking Chair Sherrod Brown just pulled off a minor miracle — a bipartisan, 21-2 committee vote to crack down on reckless bank executives. His next act: An historic change in cannabis policy. At issue for the Ohio Democrat is whether he can help resolve one of the trickiest federal-state conflicts of our time. The problem: A growing number of states are legalizing cannabis businesses but the industry is struggling to access banking services because of the federal prohibition on the drug. MM spoke with Brown about his next steps to advance a bill that would provide legal protections for lenders in the cannabis space. It’s a top banking industry priority that has been percolating in Congress without resolution for several years. Brown has complications on the right and the left. A top concern is avoiding a situation where he has the votes to advance the legislation out of committee but Republicans block it on the floor. So Brown is putting the onus on Sen. Steve Daines of Montana, a leading GOP backer of the cannabis banking bill, to deliver more Republican co-sponsors. "We're not going to take a bill to the floor and have [Minority Leader Mitch] McConnell undercut it with 58 or 59 votes," Brown said. "He's done that many times. So, we want Daines … to sign on the dotted line on this and really commit to get members to co-sponsor. If they're serious, they co-sponsor." It’s a demand that Daines’s office rebuffed on Tuesday, telling my colleague and cannabis beat reporter Natalie Fertig: “Senator Daines and Chairman Brown had an agreement when he reintroduced the bill and now Democrats are demanding changes. We have enough Republican votes to get it passed but Democrats keep moving the goalposts.” (A Brown spokesperson responded by saying he’s committed to working with members on both sides of the aisle on at path forward.) We’ll see how that goes. But it’s not Brown’s only challenge. Another issue that he needs to work out is a concern raised by Sen. Jack Reed (D-R.I.) about a section of the bill designed to make it harder for regulators to pressure banks to cut ties with certain customers, in particular for reasons of reputational risk. Its inclusion in cannabis banking bills over the years is tied to Republican concerns about initiatives like the Obama-era "Operation Choke Point,"a government effort to combat fraud that drew attacks from the right for sweeping up payday lenders and firearms dealers. Reed, a senior Banking Committee member, has warned the measure would make it harder for regulators to raise alarm about customer relationships that endanger banks. Consumer advocates have said it could hinder the policing of payment fraud. "It’s a concern, and Jack is very much a straight shooter in this as he is everything else," Brown said. "We’ve got to work it out." But that’s not all. Brown is working to schedule a floor vote for the aforementioned bank executive accountability bill. He doesn’t know the timing but expects it will most likely be considered as a standalone piece of legislation. He predicts that the committee’s fentanyl trafficking bill will be attached to a China package or the NDAA. Happy Wednesday — Whether it’s cannabis, capital, climate or crypto, we want tips: Zach Warmbrodt, Sam Sutton.
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