Safe harbor needed for CUs serving legal cannabis businesses

Legal cannabis businesses need access to safe and secure financial services, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee for its hearing on cannabis banking.

CUNA and Leagues support the Secure and Fair Enforcement (SAFE) Banking Act, a bipartisan bill introduced in both chambers in April that would provide a safe harbor for financial institutions serving legal cannabis businesses.

“The SAFE Banking Act of 2023 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,” the letter reads.

“Furthermore, the SAFE Banking Act provides a safe harbor to credit unions and their employees who are not aware if their members or customers are involved in this business. Many credit unions operate in states where their voters or legislatures have made cannabis legal in one form or another. Therefore, CUNA believes that financial institutions should be permitted to lawfully serve businesses that engage in activities authorized under their state laws, even when such activity may be inconsistent with federal law,” it adds.

CUNA notes it take no position on legalization of cannabis at the state or federal levels, but the absence of access to financial services for cannabis businesses has created a significant public safety issue.

“A 2015 analysis found that, in the absence of being banked, one in every two cannabis dispensaries were robbed or burglarized—with the average thief walking away with anywhere from $20,000 to $50,000 in a single theft,” the letter reads.