Fairbanks Daily News Miner: U.S. Sen. Lisa Murkowski joins the latest effort to pass a federal banking bill
Listen to just about any discussion about the state of Alaska’s marijuana industry, and you’ll hear an earful about the lack of accessible banking options and the headaches of dealing with cash.
That could get a fix if the latest iteration of the federal Secure and Fair Enforcement (SAFE) Banking Act, which Alaska U.S. Sen. Lisa Murkowski introduced in May along with a bipartisan coalition of federal lawmakers. The legislation would clear the haze around banking, allowing legal cannabis businesses access to banking and other financial services.
Access to banking has been a longtime headache for the industry, meaning that not only are they operating entirely in cash — taking payments, paying payroll and depositing taxes—but that it’s incredibly difficult, if not impossible, for businesses to take out traditional loans.
Though some banks and credit unions have started offering limited banking options, allowing some businesses to open checking accounts and take payments with debit cards, it’s an option that typically comes with hefty costs. And that’s not to mention the ever-shifting attitudes of the federal government.
“Alaskans voted to legalize marijuana, and since that time, numerous law-abiding businesses have been established in communities across the state,” Sen. Murkowski said in a prepared statement accompanying the announcement of the legislation. “This legislation ensures that Alaskans business owners can utilize safe financial services — just like any other legal business—instead of forcing them to continue with all-cash operations and restricted access to banks, which only serve to increase a risk of crime and threaten public safety.”
Along with Sen. Murkowski, the SAFE Banking Act was introduced by Sens. Jeff Merkley, D-Ore., Steve Daines, R-Mont., and House Reps. Dave Joyce, R-Ohio, and Earl Blumenauer, D-Ore. It’s not the first time the legislation has been introduced, and it has 38 senators who’ve already signed on and eight representatives.
In technical terms, the legislation makes four main changes to how bank regulators handle cannabis-related businesses:
· Stops regulators from prohibiting or discouraging in any way from providing financial services to cannabis businesses and cannabis-related businesses in legalized states.
· Stops regulators from terminating a bank’s federal deposit insurance because the bank is working with legal cannabis businesses.
· Stops regulators from recommending or incentivizing downgrades to services to cannabis businesses.
· Stops regulators from interfering with loans to an owner or operator of a cannabis business.
The legislation won’t require every bank to work with cannabis-related businesses, as banks could still choose not to work with such companies. Those that do, though, would benefit from protections against criminal prosecution for working with cannabis-related businesses. Under new changes to the bill, that same protection would also extend to Community Development Financial Institutions and Minority Depository Institutions, two services that serve underserved communities.
Those banks that work with cannabis businesses would have to follow the Financial Crimes Enforcement Network guidance, a system to monitor transactions for potential criminal activity that some blame for the headaches with the limited banking options. At least the legislation would call for that system to be streamlined and updated for the modern reality of legalized cannabis.
By: Matt Buxton
Source: Fairbanks Daily News Miner
