Financial Trades: Rescheduling Marijuana Won't Solve Banking Issues
Credit unions and banks risk legal repercussions if they provide services to marijuana businesses
Even if a Biden Administration plan to reschedule marijuana under the Controlled Substances Act goes into effect, enactment of marijuana banking legislation is still essential, Greg Mesack, senior vice president of advocacy at America’s Credit Unions said Wednesday.
“Marijuana banking legislation is still critical to provide safe access to financial services for the many marijuana dispensaries and marijuana related businesses across the country,” Mesack said. “The certainty offered by marijuana banking legislation would help credit unions serve these businesses without fear of the potential for stiff repercussions given the drug’s illegal status on the federal level.”
The Biden Administration is considering a proposal to reschedule marijuana from a Schedule I substance to a Schedule III substance. To accomplish the change, the proposal would have to be submitted to the Office of Management and Budget for review and then be open for public comment.
In a report issued Wednesday, the Congressional Research Service said rescheduling cannabis would make it easier for it to be prescribed for medical purposes but would not change the legality of the recreational use of marijuana. Marijuana would remain illegal on the federal level, even in states where cannabis is legal.
That is why marijuana banking legislation is so important, according to Rob Nichols, president/CEO of the American Bankers Association. “It’s important for policymakers to know that any potential decision to reclassify cannabis has no bearing on the legal issues around banking it,” Nichols said. “Cannabis would still be largely illegal under federal law, and that is a line many banks in this country will not cross.”
On Thursday, Senate Majority Leader Charles Schumer, D-N.Y., applauded the administration for considering rescheduling cannabis. He also announced that he and Sens. Cory Booker, D-N.J., and Ron Wyden, D-Ore., were introducing legislation that would legalize marijuana on the federal level. Schumer also has been pushing legislation that would allow credit unions and banks to provide financial services to marijuana-related businesses in states where cannabis is legal.
During a Senate Caucus hearing on International Narcotics Control on Tuesday, Sen. Charles Grassley, R-Iowa, sharply criticized the banking legislation. “If this legislation passes, Chinese money laundering organizations will have an additional avenue to clean dirty money,” Grassley said.