Credit unions step in where state, federal law discourage canna-businesses
Financial institutions should be permitted to lawfully serve businesses that engage in cannabis-based businesses authorized under their state laws, even when such activity may be inconsistent with federal law, said CUNA in a letter to Senate leadership Friday.
“CUNA takes no position on legalizing or decriminalizing medicinal or recreational cannabis at either the state or federal level. However, credit unions operating in states where it is legal have members and member businesses involved in the cannabis market who need access to traditional depository and lending services, the absence of which creates a significant public safety issue,” the letter reads.
Over the years, credit unions have been sought out to provide safe and affordable financial services to state-legal canna-businesses. In 2015 analysis, one in every two cannabis dispensaries were robbed or burglarized (averaging anywhere from $20,000 to $50,000 in a single theft).
The SAFE Banking Act would provide legal protections for financial institutions serving state-legalized cannabis-based businesses. The act would also provide safe harbor to credit unions and their employees who are not aware of members’ involvement with money derived from the cannabis trade.
“Indirect connections are often difficult to identify and avoid because like any other industry, those offering cannabis-related services work with vendors and suppliers. These are Main Street businesses like the printing company that makes a business card, the landlord that rents office space, and even the utility company that provides water or electricity,” the letter goes on. “Under the existing status quo, a credit union that does business with any one of these indirectly affiliated entities could unknowingly risk violating federal law.”
CUNA and the Leagues have long stood at the forefront of this issue. In 2019, CUNA hosted a witness before both the House Financial Services and Senate Banking committees on the matter.