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Michigan Credit Union League

Gov. Whitmer Joins Pursuit of Cannabis Banking Safe Harbor

The Michigan Credit Union League is extremely pleased to learn that Michigan Governor Gretchen Whitmer has joined 18 other governors on a letter to Congressional leaders urging them to pass the Secure and Fair Enforcement Banking Act (SAFE Banking Act), H.R. 1595 - U.S. House and S. 1200- U.S. Senate.

The SAFE Banking Act would provide a safe harbor for credit unions and other financial institutions that choose to serve cannabis related businesses in states where it is legal. Currently, 206 of the sitting 433 members of the U.S. House of Representatives have signed on as co-sponsors of H.R. 1595, including 8 members of the Michigan delegation (Cong. Dingell, Kildee, Levin, Slotkin, Stevens, Tlaib and Upton). In the U.S. Senate, 30 of the 100 members of that chamber have signed on to co-sponsor S. 1200, including Michigan’s U.S. Senator Gary Peters.

A tremendous amount of progress has been made on the issue of cannabis banking this session as the U.S. House Financial Services Committee held a hearing on the topic in February which resulted in a full committee markup of H.R. 1595 in late March. S. 1200 was then introduced in mid-April. In addition, the House Appropriations Committee passed legislation recently that included cannabis banking-related language, although the impact of the provision, if passed into law, is expected to be minimal and temporary. Still, inclusion of the language represents a step forward.

While we are excited to have Gov. Whitmer’s support for the SAFE Banking Act it’s important to also mention that 38 state financial institutions regulators, including Michigan’s DIFS Director Anita Fox, signed onto a joint letter to Congress urging action on legislation to create a safe harbor for cannabis banking and an equal number of state attorneys general, including Michigan’s Attorney General Dana Nessel, sent a similar letter urging safe harbor. The Michigan House of Representatives passed House Resolution 101 urging Congress to take action on cannabis banking, and the state Senate introduced Senate Joint Resolution 9, which should be heard soon.

“Credit unions seek to have the option of serving all legal consumer and business financial services needs in their fields of membership,” said MCUL President/CEO Dave Adams. “Having the bi-partisan support of state legislatures and state governors like Gov. Whitmer helps reinforce that cannabis banking should not be a partisan issue. This is not a moral judgement on the use of marijuana. It is about the safe and sound banking of all legal businesses by those financial institutions who choose to do so.”

Finally, CUNA and AACUL wrote leadership in the U.S. Senate urging adoption of safe harbor legislation. The letter was signed by credit union league presidents from across the country, including MCUL’s Dave Adams.

The current expectation on the Hill is that the U.S. House will debate and vote on H.R. 1595 prior to the August recess. Should this occur debate and consideration on the issue would shift to the U.S. Senate. MCUL will keep you apprised of any developments on this topic.

Credit unions in states where cannabis is legal still run the risk of serving cannabis businesses even without directly accepting them as clients. Indirect connections to cannabis revenue make it increasingly difficult to identify and avoid.

Under current law, any financial institution that accepts deposits from cannabis-related businesses is in violation of federal law. CUNA and MCUL have consistently advocated that Congress provide a safe harbor for financial institutions that serve state-sanction cannabis businesses from criminal penalty.

“The simple reality is that the cannabis industry does not operate in a vacuum and is dependent on main street businesses,” CUNA President/CEO Jim Nussle wrote. “These include the office supply company that provides copy paper, the landlord that rents office space, or even the utility company providing electricity and water.”

Without access to mainstream banking services, cannabis businesses are less able to obey the law, pay taxes, and follow state regulations. The public safety risk could be easily mitigated by providing financial services to these businesses, ultimately keeping cash off the streets.

Read CUNA’s letter in full here.

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2019-06-20 00:00:00