DESPITE widespread political support legislation to allow cannabis businesses access to the country’s banking system seem to have little chance of passing into law anytime soon.
The Secure and Fair Enforcement (SAFE) Banking Act was the first standalone cannabis bill to be passed by a House of Representatives in a near unanimous vote last September.
However, the bill has subsequently languished in the Republican-controlled Senate.
Senior Republicans such as Senate Majority Leader Mitch McConnell are vocal opponents and seem unlikely to allow it to progress this side of the Presidential election later this year.
The lack of progress means many cannabis business will continue to operate in an environment akin to ‘Wild West’ with some having to recruit armed guards to ferry cash.
Existing Federal rules sanction banks from working with registered cannabis businesses even though they operate within the laws of their home state.
However, following the passing of the Farm Bill in 2018 and the legalisation of hemp cultivation strict rules governing banking in this industry have been eased.
Four senior federal financial regulatory agencies recently announced that banks no longer have to take extra steps to track accounts for hemp-related businesses.
The difficulties hemp farmers have encountered are amply demonstrated by this tale of a farming family in Wisconsin, reported on the newfoodeconomy website.
Eight months after setting up their business, and associate bank accounts to run their hemp farm, they were told by the bank that their business activity was ‘outside its established risk tolerances’.
The joint statement released Federal Reserve Board, the Federal Deposit Insurance Corporation, FinCEN, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors says banks ‘are no longer required to file suspicious activity reports (SAR) for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations’.
The American Bankers Association (ABA) welcomed the announcement saying it had been ‘long sought” by the financial services industry.