Federal Legislation to Simplify Financial Services for Legal Businesses is ‘Strongly Positioned’ to Pass
More than 80 credit union professionals attended a cannabis banking panel discussion Monday, co-hosted by NWCUA and the Mountain West Credit Union Association.
Legislation that will finally make it easier for financial institutions to serve legal cannabis-related businesses has a strong chance of passing in the new Congress, according to key legislators who are sponsoring such bills.
That was a key takeaway at a virtual panel yesterday exploring the challenges credit unions face serving the legal marijuana industry. The panel was presented in a first-of-its-kind collaboration between the Northwest Credit Union Association and the Mountain West Credit Union Association, both of which represent credit unions in states that were among the first to decriminalize the use of non-medical cannabis.
Providing financial services to legal cannabis businesses is challenging because federal law still considers marijuana to be a narcotic, creating compliance risks for financial institutions that serve them. Nearly 6,500 cannabis businesses are licensed in Washington and Oregon, for example, and just 8 credit unions, one bank, and two money transmitter businesses serve them. Without financial services accounts, many businesses operate with a high cash volume, putting their employees at great safety risk.
“Washington, Oregon, and Colorado were among the first states in the country to legalize the use of cannabis,” said Troy Stang, President and CEO of NWCUA. “In these states, legal cannabis businesses are generating billions in economic impact, and employing thousands of workers. Now, with more and more states passing legalization, we felt it was time our organizations led a robust discussion to look into how we can move legislation forward to provide financial services solutions for the industry.”
Federal policymakers participating included Rep. Earl Blumenauer (D-OR-3), Rep. Ed Perlmutter (D-CO-7), and Christopher Arneson, Senior Policy Advisor for Sen. Ron Wyden (D-OR). All three elected officials have long supported federal legislation making it safe for financial institutions to serve the legal cannabis industry.
“Outdated federal rules force legal cannabis business owners and employees into the unsafe and unfair practice of carrying around cash when they should have the same access as any other small business to financial institutions,” Wyden said in a special statement to Anthem. “Reforming these regulations from yesteryear is essential to long-needed and common-sense overhaul of cannabis policy that lands especially hard on minority, women, and veteran entrepreneurs who just want to create jobs in their communities.”
During the panel, credit union leaders and policymakers discussed the Secure and Fair Enforcement Banking Act, (SAFE Act) and the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) as legislative remedies “strongly positioned” in the 117th Congress. Both acts gained significant momentum in the 116th Congress.
“The table is set. We are in an even stronger position in the Senate, and public opinion continues to grow stronger,” said Rep Blumenauer, adding that five new states legalized marijuana in the November elections.
Currently 47 states have legal cannabis-related businesses operating, including those that sell products such as CBD, medical, and/or recreational marijuana.
For context around the challenges credit unions face in serving legal businesses, Anthem reached out to the Oregon Liquor Control Commission. The agency reported there are more than 2,000 cannabis licenses in the state, while just 1,000 are known to have bank accounts.
“I think it’s safe to assume that some of the others probably have personal accounts, and/or their banks do not realize they are marijuana businesses,” said Amanda Borup, Policy Analyst.
She noted the legal businesses cannot even pay taxes to the state electronically. In the 2017-2019 biennium, 35% paid taxes in cash, 44% wrote checks, and 21% paid with money orders.
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