It's Time Congress Fixed Cannabis' Green Problem, CUNA Witness Pens Op-ed

Maps Credit Union Chief Risk Officer Rachel Pross penned an op-ed for The Hill Wednesday on the challenges credit unions face around cannabis banking. Pross' op-ed closely followed her testimony on behalf of the CUNA/League system before the Senate Banking Committee earlier this week in support of the SAFE Banking Act (H.R. 1595).

CUNA and the state leagues have not taken a position on the legalization of cannabis, but support credit unions’ ability to serve their members. In states where cannabis is legal for medicinal and recreational purposes, credit union members are engaged in this market but have difficulty accessing traditional banking services. The public safety risk continues to grow among credit unions and communities at large due to the lack of access to banking services. 

"Millions in cash is being stored in back rooms and storehouses around the country, creating a massive target for thieves. A study out of the Wharton Business School found that a typical dispensary burglar can steal up to $50,000. To put that into perspective, the average bank robber nets $7,500,” Pross wrote. “With more states legalizing cannabis in one form or another, and with the industry slated to triple by 2023, this is a rapidly growing public safety issue. But that’s not to say it can’t be fixed.”

Maps has a rigorous ongoing compliance program for cannabis-related business accounts. The program includes sophisticated anti-money laundering analytics, physical site inspections, and in-depth quarterly reviews of the financial statements and business activities of the Credit Union’s cannabis business account holders. 

“Fewer than 700 credit unions and banks are working closely with the government to serve these legal businesses as best as they currently can,” Pross added. “Operating under guidance from the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), these financial institutions continuously report on the financial activity of legal cannabis businesses, flagging actions that could indicate a business is engaged in illegal conduct such as selling across state lines, money laundering, or distributing on the black market.”

As of June 30, 2019, Maps has filed approximately 19,500 individual reports to FinCEN on cannabis related business activity in the State of Oregon in accordance with the Cole Memo and FinCEN Bank Secrecy Act guidance. 

“With the industry rapidly growing, and with more states legalizing cannabis in some form, Congress must act now to get cash off our streets, reduce money laundering and black-market sales, and protect communities from Maine to Hawaii,” Pross said.

 Pross testified before the House Financial Services Committee in February about the need for Congressional clarity on this matter. The committee passed the CUNA-supported Secure and Fair Enforcement (SAFE) Banking Act with a bipartisan vote of 45-15 in March. The bill would provide a safe harbor for financial institutions serving legal cannabis-related businesses.

Last week, Fox Business published an op-ed co-authored by CUNA President/CEO Jim Nussle on the need for a solution caused by this discrepancy in state and federal laws and Forbes posted an article about the upcoming hearing which included comments by Jim Nussle. 

Eighteen state and two territorial governors added their names to a letter urging Congress to pass legislation to enable financial institutions to provide banking services to state-licensed cannabis businesses. Gov. Phil Murphy was among the twenty signatories on the letter sent to U.S. Senate and U.S. House leadership, and the chairs and ranking members of the Senate Banking and House Financial Service committees. 

NJ Attorney General Gurbir Grewal and NJ Commissioner of Banking & Insurance Marlene Caride and NJ State Treasurer Elizabeth Maher Muoio have also added their names to colleague letters sent to Congress.

 The House version of the SAFE Banking Act currently has 206 cosponsors including eight from New Jersey, Reps. Donald Norcross (D-1), Jeff Van Drew (D-2), Tom Malinowski (D-7), Bill Pascrell, Jr. (D-9), Albio Sires (D-9), Donald Payne, Jr. (D-10), Mikie Sherrill (D-11) and Bonnie Watson Coleman (D-12). The Senate bill has 31 cosponsors including Sen. Bob Menendez (D-NJ).