Credit Unions Step In Where State and Federal Law Discourage Canna Companies | 2022-04-29
Financial institutions should be allowed to legally service businesses that engage in cannabis-based businesses permitted under their state laws, even when that activity may be inconsistent with federal law, CUNA said in a letter to executives. of the Senate on Friday.
“CUNA does not take a position on the legalization or decriminalization of medicinal or recreational cannabis at the state or federal level. However, credit unions operating in states where it is legal have members and member companies involved in the cannabis market that need access to traditional deposit and loan services, the absence of which creates a important public safety,” the letter read.
Over the years, credit unions have been called upon to provide safe and affordable financial services to legal cannabis businesses. In the 2015 analysis, one in two cannabis dispensaries were robbed or burglarized (average ranging from $20,000 to $50,000 in a single theft).
The SAFE Banking Act would provide legal protections to financial institutions servicing state-legal cannabis-based businesses. The law would also provide a safe haven for credit unions and their employees who are unaware of their members’ involvement in money from the cannabis trade.
“Indirect connections are often difficult to identify and avoid because, like any other industry, those who offer cannabis-related services work with sellers and suppliers. It’s high street businesses like the print shop that makes a business card, the landlord that rents office space and even the utility company that provides water or electricity,” the letter continues. “Under the current status quo, a credit union that does business with one of these indirectly affiliated entities could unknowingly risk violating federal law.”
CUNA and the leagues have long been at the forefront of this problem. In 2019, CUNA hosted a witness before the House Financial Services and Senate Banking Committees on the issue.