US banks and credit unions providing financial services at federal level could soon be able to serve legal cannabis businesses.
The US House Committee on Financial Services has voted through a bill to provide the legal framework for federal banking institutions to serve cannabis businesses.
But it also needs to be passed by the full House before being sent to the Senate for a vote.
Medical cannabis has been legalised in 33 US states, with 10 of these also legalising the drug for recreational use. While states like North Carolina, Mississippi, and Nebraska have decriminalised cannabis, Vermont and Washington D.C. prohibit its sale, and a federal ban on the drug is restricting financial institutions from working with traders.
Under the new legislation, the regulator would no longer be able to penalise an institution that accepts insured deposits from cannabis businesses in states where the substance is legal.
Ahead of the committee’s vote on 27 March, the National Association of Federally Insured Credit Unions (Nafcu) released a brief for credit unions on the compliance concerns they may face should they serve marijuana-related businesses (MRBs).
The cannabis industry is projected to reach over US $23bn (£17.41bn) by 2022.
Nafcu body says it is not taking a position on the broader question of legalisation or decriminalisation of the drug at the state or federal levels. But it supports legislative steps to provide clarity and legal certainty to the question of whether financial institutions may safely allow state-authorised MRBs to have access to their services.
“Although NAFCU has not endorsed a specific legislative proposal, we do support Congress examining what legislative steps can be taken to provide greater clarity and legal certainty at the federal level for credit unions that choose to provide financial services to state-authorised MRBs and ancillary businesses in states where such activity is legal,” it states in the brief.
“Even though not a total solution, a strong safe harbour for financial institutions that wish to serve such businesses would be one step toward improving clarity and addressing what is often perceived as misalignment between federal and state laws. We are pleased to see legislation that takes steps toward this goal; however, Congress should continue to examine all possible solutions in this area.”