Request to Address Regulatory Conflict for Medical Cannabis Banking
The Division of Financial Institutions, Department of Commerce and Consumer Affairs, along with a coalition of financial regulators from more than 20 states is asking Congressional leaders to consider legislation that creates a safe harbor for financial institutions to serve businesses operating legally under state law or entrust states with the full oversight and jurisdiction of cannabis-related activity.
Commissioner Iris Ikeda and regulators from 24 other states and territories sent a letter to Congress describing the well-documented conflict between federal and state law, which has created barriers for financial institutions desiring to serve businesses involved in state-licensed cannabis activities. The regulators shared their concerns with respect to public safety, increased difficulty of tracking the flow of funds, contributions to a loss of economic activity, workforce development, and community development opportunities.
“A majority of states now have medical cannabis programs and it has become increasingly necessary to craft policy to respond to emerging challenges,” said Commissioner Ikeda. “We want to establish a safe harbor for banks to serve these entities in an effort to reduce the risk with large cash-intensive operations and bring the safeguards, activities, and standards into the regulatory reporting compliance framework.”
As of March 31, 2019, 47 states, the District of Columbia and the territories of Guam and Puerto Rico have legalized medical and/or recreational cannabis usage.