Last month, Shield Compliance participated in NCIA Lobby Days in Washington, D.C. to demonstrate our support for passage of the SAFE Banking Act in Congress. Recognition of state cannabis laws at the federal level is a key imperative for the future of cannabis banking. Fortunately, marijuana reform is also a key priority for many lawmakers and their constituents.
Significant progress has been made in terms of the introduction of legislation that addresses the lingering conflict between state and federal law. Most notably, the SAFE Banking Act and STATES Act are likely to pass easily in the House this session, while passage in the Republican-controlled Senate is less certain.
A key takeaway from our meetings with members of Congress and other industry representatives is that there are opportunities for members of both parties to work together on issues that can gain majority support, including:
Agreement on the need to protect banks. Earlier this month, new language was added to an appropriations bill that bars federal regulators from punishing financial services providers for maintaining accounts for state-legal cannabis businesses. The NCIA describes this as a “temporary fix” that “could provide the cannabis and banking industries with a much-needed reprieve while stand-alone legislation [e.g. the SAFE Banking Act] gains more support in the Senate."
Alignment on hemp legalization. Lawmakers have brought forward a provision that would expand banking protections to businesses marketing hemp and hemp-derived CBD products. Hemp legalization is an important issue for Senate Majority Leader McConnell (R-KY), who championed passage of the 2018 Farm Bill and is now heading into a 2020 reelection campaign.
A focus on security and public safety. In our meeting with the general counsel for Rep. Nydia Velázquez (D-NY), chairwoman of the House Small Business Committee, we learned that there’s interest on both sides of the aisle to protect small businesses that are disadvantaged by the industry’s reliance on cash transactions. Not only would a bipartisan policy solution improve public safety, but it would also put small businesses on a more equal playing field with larger operators that have the resources required to transport and store large volumes of cash.
Sen. Cory Gardner (R-CO), a lead sponsor of the SAFE Banking Act, recently said, “the consistent drumbeat of businesses and organizations and individuals going in to share their story … has really made a key difference in terms of how we’re going to pass legislation to actually fix this conflict.”
It was a great experience to be a part of this “drumbeat” with Shield’s president and COO Tony Repanich and contribute to the policy solutions that will bring cannabis banking into the mainstream. With cannabis reform on the horizon, we encourage banks and credit unions watching from the sidelines to start evaluating the risks and rewards associated with serving this industry, and how they can start gaining a first-mover advantage on new customer relationships.