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CEO DATELINE – Associations lobby to let banks, credit unions service cannabis industry

June 7, 2019
By Walt Williams

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At least three associations representing banks and credit unions are lobbying Congress to allow their members to service cannabis-related businesses without running afoul of federal law, the Center for Responsive Politics reported Friday.

The American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America are urging lawmakers to pass the SAFE Act, which would allow banks and credit unions to do business with the cannabis industry in states where marijuana is legal, according to CPR. The House of Representatives appears poised to pass the legislation after it sailed out of committee with little opposition.

“In terms of safety, statistics show that cash-only businesses increase the risk of crime. This is especially true in the cannabis sector given the lack of access to basic financial services,” Rachel Pross, chief risk officer for Maps Credit Union, told a House Finance Services subcommittee during a Feb. 13 hearing in which she testified on behalf of CUNA.

“Credit unions do not have a position on the federal legalization of cannabis,” she said. “The simple fact of the matter, however, is that many credit unions operate in states and communities that have made cannabis usage or growth legal for medicinal and/or recreational purposes. We strongly believe that financial institutions should be permitted to lawfully serve businesses that engage in activities that are authorized under their state laws, even when such activity may be inconsistent with federal law.”

The associations are taking the lead for the financial services industry, as relatively few major banks have publicly come out in favor of the bill. Republicans have been the main obstacle to similar measures in the past, but their stance has softened in recent years, as evidenced by Former House Speaker John Boehner (R-Ohio) recently joining the board of directors of a marijuana firm. Still, that may not be enough to get the bill out of the GOP-controlled Senate, where Senate Banking Chair Mike Crapo (R-Idaho) won’t commit to moving the legislation forward, CPR reported.