HR-10471-119
Referred to the House Committee on Financial Services.
Sponsored by Nydia Velázquez (D-NY)
What it does
The bill would bar federal agencies from penalizing, discouraging, or taking adverse supervisory action against insurers that provide insurance to cannabis businesses operating legally under state, local, or tribal law, or to their owners, employees, and landlords. It would also bar federal liability for those insurers and their officers and employees for doing so. It would not require any insurer to offer coverage, and it would preserve state insurance regulation under the McCarran-Ferguson Act. A separate section would direct the Government Accountability Office to study barriers to licensing and financial services for minority-owned and women-owned cannabis businesses.
Who benefits
State-licensed cannabis growers, manufacturers, and dispensaries that may find it easier to get property, liability, and workers' compensation coverage. Insurers and their officers and employees who would gain protection from federal liability and supervisory action. Employees of cannabis businesses, who may gain workers' compensation coverage. Landlords and equipment lessors to those businesses. State and tribal governments with cannabis programs. Minority-owned and women-owned business applicants, who may benefit indirectly from the GAO study.
Who is hurt
Federal agencies, which would lose discretion to discourage or act against insurers over cannabis-related business. Federal drug-enforcement interests, because the bill would narrow how federal law applies to cannabis-related financial activity while cannabis stays illegal federally. States and communities that restrict cannabis and may see expanded commercial activity in neighboring jurisdictions. Insurers that decline to cover cannabis businesses may face competitive pressure. Taxpayers would bear modest GAO study costs.
Supporters argue
Supporters argue that cannabis businesses legal in most states struggle to obtain basic insurance because federal illegality creates legal risk for insurers, leaving workers, customers, and landlords exposed to uninsured losses. They contend a narrow safe harbor, modeled on proposed banking legislation and leaving coverage voluntary and state regulation intact, would improve safety and accountability. They also point to the GAO study as a way to identify licensing and financial barriers facing minority-owned and women-owned businesses.
Opponents argue
Opponents argue that cannabis remains a Schedule I controlled substance under federal law, and a safe harbor for insurers would erode that status without Congress resolving the broader question through rescheduling or legalization. They contend that shielding financial services firms from federal liability could weaken oversight and anti-money-laundering tools, and that limiting agency supervisory discretion constrains regulators' ability to monitor risk. Some also argue that incremental carve-outs entrench commercial cannabis interests before the health and public safety effects are fully studied.
Constitutional context
Congress's power to regulate interstate commerce under Article I, Section 8, which Gonzales v. Raich (2005) applied to uphold federal prohibition of even state-legal home-grown cannabis, supports federal legislation limiting how federal law applies to insurers. The bill does not raise Tenth Amendment anti-commandeering concerns because it restricts federal agencies rather than directing states, and it preserves state insurance regulation consistent with the McCarran-Ferguson Act.
Checks and balances
Congress would gain authority by limiting executive agency discretion over insurers, while federal agencies lose enforcement and supervisory latitude; courts would interpret the "solely because" limits, and Congress retains oversight through the GAO report.
Historical precedent
Congress has considered similar safe-harbor language for banks in the SAFE Banking Act, which passed the House several times but was not enacted, and the Rohrabacher-Farr appropriations rider has restricted DOJ spending against state-compliant medical cannabis programs since 2014.