New Hurdles Emerge as Senate Panel Considers Marijuana Banking Bill

Credit unions, gun owners raise objection to measure.

David Baumann


Sep 27



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David Baumann

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David Baumann

A squiggly pink arrow pointing downward and to the right.
A marijuana leaf atop a hundred dollar bill.

The Senate Banking Committee may approve marijuana banking legislation today, but some groups—ranging from credit unions to gun owners—are raising red flags over sections of the bill that have nothing to do with cannabis.

CUNA and NAFCU have sent letters indicating their support of S. 2860, legislation known as the “SAFER Banking Act,” introduced last week by Sen. Jeff Merkley, D-Ore. The bill now has 12 cosponsors—six of whom are members of the Banking Committee.

“The risks associated with a lack of access to financial services, including deposit accounts, are too high,” NAFCU Vice President of Legislative Affairs Brad Thaler, wrote in a letter to the Banking Committee.

CUNA President/CEO Jim Nussle agreed.

“This important legislation will bring consistency and common sense to federal law in the area of banking regulation where it intersects with the country’s legal cannabis businesses,” he wrote in a letter to the committee.

What’s in the Bill?

Since marijuana is illegal under federal law, credit unions and banks risk regulatory sanctions for providing financial services to cannabis-related businesses even in states where cannabis is legal.

Merkley’s bill “would offer narrowly targeted federal protections for credit unions and other financial institutions accepting deposits, extending credit, or providing payment services to an individual or business engaged in cannabis related commerce in states where such activity is legal with a safe harbor, so long as they are compliant with all other applicable laws and regulations,” Nussle wrote.

State Legislatures Offer Support

The National Conference of State Legislatures also offered support for the bill.

“Our current system relies on cash-only cannabis transactions, increasing the real risk that these cannabis businesses become prime targets for theft, burglary, armed robbery and other property crimes that jeopardize the safety of the business owners and the communities in which they operate,” NCSL CEO Tim Storey wrote, in a letter to Senate leaders.

Danger Signs

However, CUNA, NAFCU and the Gun Owners of America are raising red flags over sections of the bill that have nothing to do with marijuana.

Those provisions would require that credit unions and banks not discriminate against groups or people based on personal or political beliefs.

That language was intended to attract Republican support for the overall bill.

For several years, GOP members of Congress have sought a way to prevent a repeat of “Operation Choke Point,” an Obama Administrative initiative that critics say allowed banks to restrict financial services for gun-related businesses.

Democratic senators recently announced changes to those provisions, in an effort to satisfy Democrats who said they were too broad.

CUNA, NAFCU Warnings

But Thaler warned that the new language creates rulemaking authority that is overly broad and appears to give regulators broad discretion in determining ways in which financial institutions interact with consumers in attempting to increase access.

That section states that within two years of enactment of the bill, banking regulators would be required to “collectively promulgate rules or guidance to increase access to deposit accounts for businesses and consumers.”

Thaler questioned another section of the bill that would allow regulators to have “another reason” for asking a financial institution to close a deposit account.

“We are concerned that this is overly broad and could certainly lead to some creative decisions from banking regulators,” he wrote. “Termination decisions should only be based on violations of the law, unsafe or unsound practices, or violations of exam-related issues.”

Gun Owner Complaints

Meanwhile, the group, Gunowners of America, said the legislation does not go far enough in protecting the rights of gun owners.

In a letter to senators, they wrote that S. 2860 would water down language designed to prevent financial institutions from closing accounts based on “reputational risk.”

“The SAFER Banking Act would allow financial institutions to ignore the federal restrictions on marijuana yet does not extend those same privileges to those who exercise the constitutional right to keep and bear arms,” the group wrote on its website. 

Menendez Issue

Banking Committee members will be facing another distraction when the committee convenes.

Last week, panel member Sen. Robert Menendez, D-N.J., was indicted by a federal grand jury on public corruption charges. Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, is among the senators who have called on Menendez to resign as a result of the charges.

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