R Street Welcomes Committee Efforts on Marijuana Banking
WASHINGTON (Feb. 13,
2019) – The R Street Institute welcomes today’s hearing by the U.S. House Committee
on Financial Services exploring access to banking services for legitimate cannabis-related
businesses.
Despite laws providing for the legal distribution of
medicinal marijuana in 32 states and for decriminalization of recreational
marijuana in 10 states plus the District of Columbia, the federal Controlled
Substances Act and myriad banking statutes and regulations continue to make it difficult
for banks and credit unions to provide financial services to those businesses
that operate in accordance with state cannabis laws.
Though there has been progress in lenders’ willingness to
serve the legal cannabis industry, the potential for criminal and civil
liability, including money-laundering, remains a stumbling block to bringing
more deposits into the traditional banking sector, according to R.J. Lehmann, R
Street’s director of finance, insurance and trade policy. According to the most
recent data from the U.S. Treasury Department’s Financial Crime Enforcement
Network, there were 375 banks and 111 credit unions serving cannabis-related
business accounts as of the fourth quarter of 2018.
“Even where lenders are providing financial services to the
legal marijuana industry, the compliance processes that currently would be
appropriate to service this sector effectively are daunting and beyond what
many smaller lenders could manage,” Lehmann said. “We need federal law to
provide guidance, clarity and a permanent safe harbor for depositories who work
with state-sanctioned cannabis businesses.”
The Secure
And Fair Enforcement (SAFE) Banking Act of 2019, introduced by Rep. Ed
Perlmutter, D-Colo., would provide exactly that. The bill would ensure that
federal banking and credit union regulators could not sanction regulated
lenders or limit their access to deposit insurance on grounds that they provided
service to legitimate cannabis businesses. Reps. Steve Stivers and Warren
Davidson, both R-Ohio, recently joined Perlmutter and Rep. Denny Heck, D-Wash.,
as sponsors of the legislation.
“We extend our thanks to Chairwoman Waters for convening
this hearing and moving this topic to the top of the committee’s agenda. In an
era of often fractious partisan divides, Rep. Perlmutter’s legislation offers an
opportunity for bipartisan consensus and real solutions,” Lehmann said.
