Key Senators Unveil Revised Marijuana Banking Bill

CUNA endorses updated legislation.

David Baumann


Sep 21



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David Baumann

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David Baumann

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A week before the Senate Banking Committee marks up marijuana banking legislation, a group of Democratic senators on Wednesday unveiled a revised bill that makes changes to an unrelated provision that was intended to gain Republican support.

The revised bill keeps provisions that would provide financial institutions with a regulatory safe harbor for providing services to marijuana-related businesses.

As a result, CUNA quickly endorsed the revised bill; NAFCU also has supported marijuana banking legislation.

The new measure makes changes to a provision that had been criticized by Democrats who otherwise supported the marijuana banking plan.

In an attempt to guarantee Democratic support, the revised proposal provides additional details about how and when a federal regulator may tell a financial institution to close an account. The original provision had been intended to attract Republican support for the overall bill.

The Senate Banking Committee will mark up the revised bill on Sept. 27. Senate Majority Leader Charles Schumer, D-N.Y., has said that enactment of marijuana legislation remains a priority of his.

Who Is Sponsoring the Legislation?

Notably, Schumer is a co-sponsor of the revised bill. He is joined by Sens. Jeff Merkley, D-Ore.; Steve Daines, R-Mont.; Kyrsten Sinema, I-Ariz.; Cynthia Lummis, R-Wy.; Kevin Cramer, R-N.D.; Cory Booker, D-N.J.; Dan Sullivan, R-Alaska; and Bob Menendez, D-N.J.

“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said, in a statement. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”

A major purpose of the legislation is to shift marijuana-related business away from cash-reliant businesses and into the financial mainstream, while promoting public safety in communities where these businesses operate, according to a summary of the measure released Wednesday.

What Else Does the Bill Cover?

In addition, the revised measure would:

–Not require a credit union or bank to serve marijuana-related businesses even in states where cannabis is legal.

–Require the Federal Financial Institutions Examination Council to develop uniform guidance and examination procedures for credit unions and banks serving marijuana-related businesses.

–Provide that income derived from a state-sanctioned cannabis business be treated the same as any other legal income for determining eligibility for residential mortgages.

–Require that federal banking regulators ensure that credit unions and banks do not restrict access to financial services based on personal or political beliefs. This provision is intended to prohibit programs such as the Obama Administration’s “Operation Choke Point,” which critics said allowed banks to restrict gun-related businesses from receiving financial services. During the past several years, that provision has been added to attract Republican support for the marijuana banking bill.

However, some Democrats—most notably Sen. Jack Reed, D-R.I.—and some consumer groups said the original plan provision would have hampered efforts by a financial regulator to warn a financial institution about a specific member or customer.

–Require federal banking regulators to report annually to relevant congressional committees on the number of deposit accounts that had been terminated and the legal basis for the termination.

–Require banking regulators and other executive agencies to issue tailored rules or guidance intended to increase access to banking services, particularly in rural, low- and moderate-income areas, Tribal communities and business and consumers who are unbanked.

–Require that the Government Accountability Office conduct a study on barriers that minorities, veterans, and women face in opening cannabis-related businesses. Groups such as the Minority Cannabis Business Association have expressed concern that minority business owners may face significant hurdles in opening marijuana-related businesses.

Response From Credit Union Group

CUNA President/CEO Jim Nussle on Wednesday sent senators a letter endorsing the revised bill.

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