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NCUA Board Member Hood discusses normalizing cannabis banking at EMC event
NCUA Board Member Rodney Hood delivered a keynote address at the Emerging Markets Coalition’s (EMC) Out of the Weeds (OOTW) event Thursday where he discussed normalizing cannabis banking within the financial services industry. Of note, Hood stated that marijuana-related businesses (MRBs) can stimulate the American economy and credit unions can help facilitate their growth.
Hood expressed that marijuana legalization is “inevitable”; therefore, it’s important to harmonize regulations ahead of time and be ready to act quickly in the future. From a regulatory front, Hood called for prompt, definitive action from Congress and the USDA on this issue. He referenced the House-passed Secure and Fair Enforcement (SAFE) Banking Act representing a positive step; but in general, action has been too slow. Although state-level progress is encouraging, Hood noted a federal solution is necessary and vastly preferable to a patchwork of state standards.
Hood referenced the NCUA’s internal working group on this specific issue, making clear that the agency is working to help normalize marijuana banking. Of note, the NCUA has created a compendium of state laws on this issue to inform NCUA examiners and credit unions may consider serving businesses in this market if they follow applicable Bank Secrecy Act (BSA) and Know Your Client (KYC) requirements. He emphasized that the NCUA will work with credit unions in this area.
NAFCU wrote to the House offering support for including marijuana banking legislation, the SAFE Banking Act, as an amendment to the America COMPETES Act. In addition, the association in 2021 updated its Marijuana Banking Issue Brief including the SAFE Banking Act. The association will continue to keep credit unions updated of legislative and regulatory changes that could impact their operating environment.