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An Update on the Marijuana Banking Landscape

Last year was a big year for marijuana banking. First, the SAFE Banking Act, a bill that would allow a safe harbor for financial institutions to legally bank marijuana-related businesses (MRBs), passed in the House. Second, the U.S. Department of Agriculture (USDA) published an interim final rule laying out a regulatory framework for legal hemp farming. Third, the NCUA published guidance giving credit unions the green light to bank hemp and hemp-related businesses. Despite this movement, the future of a federal safe harbor to bank MRBs remains hazy (pun intended). Given the Senate’s current stance on House-passed legislation, the fact that 2020 is an election year, and there may be bigger fish to fry, we may not see the successful passage of legislation. But, if we see a shift in Democratic control of the Senate, then it is very possible that legislation may be passed in 2021.

Federal Legislation – or Lack Thereof, to be Blunt.

Senate Banking Committee Chairman Mike Crapo issued a press release at the end of last year re-affirming his opposition to marijuana legalization at the federal level, as well as his opposition to the House-passed SAFE Banking Act. Chairman Crapo identified several issues with the bill and laid out changes that he would like to see in a Senate bill. Concerns include public health and safety, preventing bad actors and cartels from using legacy cash and the financial system to launder money, updating the 2014 FinCEN rules and guidance, respect for state rights in interstate commerce, and eliminating “Operation Choke Point” initiatives. To address these concerns, Chairman Crapo suggested that any potential Senate version include:

  • Preventing the banking of high potency THC, and THC potency levels of no more than 2%,
  • Preventing distribution to anyone under the age of 21, and
  • Clarifying the treatment of hemp.

These are just a few of the options Chairman Crapo supports to alleviate his concerns. The public may comment on Chairman Crapo’s suggestions.

Regulations may be Growing

Serving hemp-related businesses is included in the NCUA’s 2020 supervisory priorities letter to credit unions. Examiners will be collecting data through the examination process of the types of services that credit unions are providing to hemp and hemp-related businesses. The NCUA published interim guidance last year, which we expect updates to now that the USDA has published their interim final rule. 

After the USDA published their interim final rule regarding hemp, we saw a rise in the number of warning letters issued by the Food and Drug Administration (FDA) to companies for illegally selling and marketing products containing CBD. The popularity of CBD products has skyrocketed, and it seems to be available in everything – food, drinks, pet food, lotions. In 2019, the FDA issued a total of 22 warning letters as compared to just one in 2018. We are still waiting on regulations from the FDA concerning hemp and hemp-derived products that we expect to be published this year.

States Continue to Blaze Trails

There are now 33 states with legal medical marijuana, and another 11 states and DC with legal recreational marijuana. We continue to see movement at the state level for legalization in some form.  In Mississippi and South Dakota, activists collected enough signatures to qualify a medical marijuana initiative in 2020. Similarly, marijuana advocates in South Dakota collected enough signatures for a recreational initiative in 2020. There have also been significant pushes in New Mexico and Rhode Island for some form of legalization.

On the hemp side, the USDA approved the regulatory plans for six states. Many more states have submitted plans to the USDA and are waiting for approval. Once a state submits a plan, the USDA has 60 days to approve, so we will see more states with approved regulatory plans in the coming months and throughout the year.

Check out NAFCU’s updated issue brief on Marijuana Banking and other resources. If you have questions about marijuana banking, please reach out to me at

Programming Note. NAFCU's office will close at noon today and will also be closed on Monday, February 17 for Presidents' Day. We will be back to blogging on Wednesday, February 19. Have a wonderful holiday weekend!

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