Federal cannabis banking legislation looked promising, then politicians weighed in
When the Secure and Fair Enforcement (SAFE) Banking Act passed the House of Representatives in September with strong bipartisan support, a collective cheer went up among financial institutions that had boldly created cannabis banking programs.
It appeared our elected representatives were coming round to the needs of their constituents, which included safe communities protected from the threats posed by unbankable cash traversing our city streets in duffel bags, suitcases and backpacks.
The SAFE Act, it was thought, would give banks and credit unions a green light to establish compliant cannabis programs to accept cash without the threat of regulatory reprisal.
That autumn cheer has now turned into a winter groan as the Senate Banking Committee, under the direction of Senator Mike Crapo of Idaho, has doused the SAFE Act with the cold water of legislative political maneuvering.
Senator Crapo announced that the Senate will not be advancing the bill until significant and diluting changes are made to appease the anti-cannabis cabal of senators who control the banking committee. As a result, cannabis banking remains as elusive to legal business owners as a leprechaun's pot of gold.
For the handful of financial institutions like ours that knowingly accept the risks of banking cannabis money it is discouraging that those charged with creating law are effectively encouraging business owners to break the law.
Without a legitimate, transparent bank account many cannabis operators result in "hiding" their money behind blandly named entities to obscure the nature of its source from their banks, thus committing bank fraud. They know that if the true source of the funds is discovered, their banks will likely shut down their account.
Transparent banking not only serves the needs of the business owner, it also assists the government in several important ways. It facilitates the payment of taxes (a highly desirable outcome for government), it provides a paper trail for cannabis transactions that could assist law enforcement if needed and it ensures that those businesses qualifying for a bank account have been thoroughly vetted to be licensed and legal entities.
Without transparent banking, the black market will flourish, taxes won't get paid and cash will be exposed to any criminal element willing to do a snatch and grab.
Our credit union will continue to serve legal cannabis operators with or without the Senate's support. We are making our community safer and serving the greater public good. We go to great expense and pain to do so but our mission as a credit union is to fill the void left by banks unwilling or unable to serve all segments of our community.
It is the right thing to do. We hope our example will be noted and followed by our elected officials.