April 28, 2023

NAFCU backs reintroduced bipartisan marijuana banking bills

US Capitol buildingThe Secure and Fair Enforcement (SAFE) Banking Act, which would provide greater clarity and legal certainty at the federal level for financial institutions to provide services to marijuana-related businesses (MRBs) in states that have legalized marijuana, was introduced by a bipartisan group of lawmakers in both the House and Senate.

Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., and Reps. Dave Joyce, R-Ohio, and Earl Blumenauer, D-Ore., are the main sponsors of the legislation; S. 1323 has an additional 38 cosponsors in the Senate and H.R. 2891 has eight cosponsors in the House.

NAFCU Vice President of Legislative Affairs Brad Thaler sent letters to Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky., and House Speaker Kevin McCarthy, R-Calif., and Minority Leader Hakeem Jeffries, D-N.Y., urging the chambers to pass the legislation.

Thaler explained that previously released and rescinded guidance from U.S. attorneys general and the Financial Crimes Enforcement Network (FinCEN) have created uncertainty, as well as “regulatory challenges that compound the uncertainty of providing financial services to state-authorized [MRBs].”

“These go beyond just concerns about criminal or civil penalties, but also extend to requirements related to proper Suspicious Activity Report (SAR) and anti-money laundering (AML) filings as required under the Bank Secrecy Act, access to federal deposit insurance and a Federal Reserve master account, and even potential issues with the Internal Revenue Service (IRS),” Thaler wrote. “Missteps in these areas could prove devastating to an institution. It should be noted that these risks also exist when providing financial services to ancillary businesses that provide products and services to MRBs and fall within the credit union’s field of membership, even if the state-authorized MRB does not.”

Though NAFCU does not have, and is not taking, a position on the broader question of the legalization or decriminalization of marijuana at the federal or state level, the association has long offered support for the SAFE Banking Act for credit unions to be able to safely and compliantly offer banking services to small businesses that serve the legal cannabis industry. NAFCU President and CEO Dan Berger last year urged Congress to include its provisions in must-pass legislation given its broad bipartisan, industry, and public support.

NAFCU will continue to advocate in support of this legislation.