DENVER/PORTLAND, Ore.–In what the two organizations described as a first-of-its-kind collaboration, the Mountain West Credit Union Association (MWCUA) and the Northwest Credit Union Association (NWCUA) partnered to present a virtual panel discussion on cannabis banking.
Participating in the discussion were Rep. Ed Perlmutter (D-CO), Rep. Earl Blumenauer (D-OR) and Christopher Arneson, senior policy advisor for Sen. Ron Wyden (D-OR), to discuss the unique challenges financial services providers face serving the industry, what legislation is in the pipeline, and how credit unions are involved in the process.
“Typically, this is the week in our industry when the credit union presence on the Hill in Washington is strong,” said Scott Earl, president & CEO of MWCUA, referring to CUNA’s GAC. “Because we are having our annual advocacy events virtually, we had an opportunity to work with the Northwest Association to address a topic that is growing across the country. This gave us a forum to bring together the legislative champions on this issue to meet with credit unions across both of our regions. We have a chance to work together to help address a serious need.”
Both associations cited the difficulty of providing financial services to legal cannabis businesses due to federal law that considers marijuana to be a narcotic, creating compliance risks for financial institutions that serve the legal businesses in their states.
‘Robust Discussion’
“Washington, Oregon, and Colorado were among the first states in the country to legalize the use of cannabis,” said Troy Stang, president and CEO of the NWCUA. “In these states, legal cannabis businesses are generating billions in economic impact, and employing thousands of workers. Now, with more and more states passing legalization, we felt it was time our organizations led a robust discussion to look into how we can move legislation forward to provide financial services solutions for the industry.”
At present, the non-medical use of cannabis is decriminalized in 16 states (plus the U.S. Virgin Islands), and legalized in another 14 states (plus Guam, the Northern Mariana Islands, and the District of Columbia). A total of 47 states have some form of legal marijuana businesses operating, including products such as CBD, medical marijuana, and recreational marijuana, the associations noted.
Bill Discussed
The MWCUA and the NWCUA reported the panelists discussed the Secure and Fair Enforcement Banking Act (SAFE Banking Act), which would:
- Give explicit legal clearance for financial institutions to grant banking services to state-sanctioned cannabis businesses and related business entities.
- Offer much-needed, narrowly targeted federal protections for credit unions and other financial institutions who accept deposits from, extend credit to, or provide payment services for an individual or business engaged in cannabis-related commerce in states where the activity is legal ─ as long as the activity is compliant with all other applicable laws and regulations.
- Bring revenue from states sanctioned cannabis entities and hemp businesses into the financial services mainstream and, as a result, keeping communities safe by removing vast amounts of cash off the streets.
- Increase the reporting and transparency of information about the cannabis industry to the benefit of law enforcement, tax revenue officials, and other regulators.
Legislative ‘Momentum’
Noting the momentum the Act gained in the last Congress, all panelists said they think it could pass during this session, according to the organizations.
“The table is set. We are in an even stronger position in the Senate, and public opinion continues to grow stronger,” said Rep Blumenauer, reminding that five new states legalized marijuana in the November elections.
Perlmutter, whom the associations described as a longtime friend of credit unions, helped champion efforts to forge a path for safe and necessary financial services for cannabis businesses.
“Thank you to Mountain West Credit Union Association for the opportunity to update members on the status of cannabis banking and the SAFE Banking Act,” said Perlmutter. “I appreciate the partnership of the organization and its members as we continue to push forward to ensure equal access and transparency in the financial system.”
The two CU trade groups said Wyden has also long supported a federal legislative remedy for financial institutions to serve the legal marijuana industry. In his home state of Oregon, more than 2,500 licensed cannabis businesses are licensed to grow and sell marijuana and marijuana products.
‘Outdated Rules’
“Outdated federal rules force legal cannabis business owners and employees into the unsafe and unfair practice of carrying around cash when they should have the same access as any other small business to financial institutions,” Wyden said. “Reforming these regulations from yesteryear is essential to long-needed and common-sense overhaul of cannabis policy that lands especially hard on minority, women, and veteran entrepreneurs who just want to create jobs in their communities.”
Approximately 84 credit union executives from across the two association’s six states attended the virtual event as a kickoff to activities in conjunction with the CUNA’s GAC. Other events include Hill visits with the region’s legislative members.