The banking associations from all 50 states and 1 U.S. territory sent a joint letter to leaders of the Senate Banking Committee on Monday, to urge advancement of bipartisan legislation that would protect financial institutions that service marijuana businesses. The banking associations complained that while the SAFE Banking Act cleared the House Financial Services Committee in March (with a bipartisan vote of 45 to 15), no action has been taken on the companion bill in the Senate for two months. Again, the primary concern expressed was that current law forces state-legal businesses to operate on a cash basis, which poses a safety risk, complicates enforcement efforts, and could damage local economies.
“Since 1996, 33 states comprising 68 percent of the nation’s population have legalized cannabis for medical or adult use, and that number is only expected to grow,” the banking associations wrote. “Despite this ever-growing voter preference, current federal law continues to prevent banks from safely banking these businesses without fear of federal sanctions. Leaving the cannabis industry unbanked presents serious public safety, revenue administration, and legal compliance concerns and must be remedied immediately.”
“Because revenue paid to them by cannabis businesses can be considered monies derived from illegal activities, financial institutions that bank the unrelated businesses can be accused of violating anti-money laundering laws. If banks are forced to discontinue relationships with these unrelated businesses, a significant portion of the economy in states where cannabis is legal will be cut off from the regulated banking system.”
The banking associations emphasized that their letter didn’t take a position on the legalization of marijuana, but that its members “are committed to serving the financial needs of their communities – including those that have voted to legalize cannabis.” While acknowledging the issue, they plead that the Senate Banking Committee “focus narrowly on the urgent banking problem at hand, which is within your power to resolve. Doing so will reap immediate public safety, tax and regulatory benefits while Congress contemplates broader decisions about national drug policy.”
This letter came shortly after the National Association of State Treasurers also adopted a resolution earlier in the month urging Congress to pass legislation to “provide essential banking services to state legalized cannabis businesses.” Led by Oregon State Treasurer Tobias Read, 17 State Treasurers also wrote a joint letter to the Congressional Leaders, requesting that legislation “provide a safe harbor for depository institutions that provide a financial product or service to a covered business in a state that has implemented laws and regulations that ensure accountability in the cannabis industry. The [SAFE] Banking Act (H.R. 1595) or similar legislation would remove the legal uncertainty for banks and credit unions, reducing their risk and moving billions of dollars into the banking system.” That was quickly followed by the National Association of Attorneys’ General’s official endorsement of the bill, and an excellent Congressional Budget Office score, showing that passage of a cannabis banking bill would lead to a significant increase in deposits and save federal dollars overall.
All in all, it seems like a no-brainer that Congress would finally pass a bill allowing for marijuana banking. For background on recent marijuana and hemp banking proposals, see: