Yellen Endorses Marijuana Banking Bill
Legislation remains stalled on Capitol Hill
Treasury Secretary Janet Yellen endorsed legislation last week that would provide financial institutions with a regulatory safe harbor if they serve marijuana-related businesses in states where cannabis is legal.
Yellen told the House Appropriations Financial Services Subcommittee that since marijuana is outlawed by the federal government, credit unions and banks are reluctant to provide financial services to cannabis-related businesses.
“I think legislation may be necessary to raise the comfort level,” she said. “We potentially would welcome legislation in this area that would clarify for banks what their responsibilities are.”
Since marijuana is illegal on the federal level, credit unions and banks can open themselves up to sanctions from federal regulators if they do business with cannabis-related firms. Supporters of marijuana banking legislation, including America’s Credit Unions and banking trade groups, have said that as a result of those concerns, cannabis-related businesses often are forced to conduct all transactions in cash. That makes the businesses vulnerable to robberies.
Marijuana banking legislation remains stalled in Congress. The Senate Banking Committee has approved S. 2860, its version of marijuana banking legislation. However, the bill has not gone to the Senate floor.
In the past, under Democratic control, the House has passed marijuana banking legislation. During this Congress, House Financial Services Chairman Rep. Patrick McHenry, R-N.C., has said that the marijuana banking bill was not one of his priorities, so right now it faces an uncertain future in the House.
The House lost its most outspoken marijuana banking advocate when Rep. Ed Perlmutter, D-Colo., retired at the end of the last Congress. However, he’s still pushing the issue. Perlmutter and his Deputy Chief of Staff, Alison Wright, recently registered as lobbyists for the National Cannabis Roundtable.
Yellen is not the only one who supports the marijuana banking bill.
The American Bankers Association last week released a wide-ranging poll on financial services issues. The ABA reported 63% of those polled said they support Congress passing legislation that would allow marijuana businesses to gain access to financial services in states where cannabis is legal. In the poll, 18% said they oppose that plan, with the rest having no opinion. The poll of 4,423 adults was conducted by Morning Consult from March 8-10. It had a margin of error of plus or minus 1 to 2 percentage points.
ABA President/CEO Rob Nichols said the poll demonstrates that people want the conflict between state and federal laws to be resolved. “Americans have made it clear that Congress should resolve the ongoing conflict between state and federal law on cannabis banking issues by passing legislation that will enhance public safety, tax collection and transparency,” said Nichols.