- The Senate Committee on Banking, Housing and Urban Affairs will hold a hearing at 10 a.m. Eastern time Tuesday addressing the banking challenges facing marijuana-related businesses.
- The hearing, titled "Challenges for Cannabis and Banking: Outside Perspectives," comes as the bipartisan Secure and Fair Enforcement (SAFE) Banking Act is gaining momentum in Congress.
- Witnesses expected to testify include Sens. Cory Gardner, R-CO, and Jeff Merkley, D-OR, as well as executives for Maps Credit Union and Citywide Bank.
H.R. 1596, the SAFE Banking Act, would create protections for financial institutions that provide services to cannabis-related businesses. A growing number of states have legalized some uses of marijuana, but the drug is still illegal at the federal level, leaving many banks reluctant to service the industry.
The Safe Banking Act, which is approaching a floor vote, has 206 co-sponsors.
Senate Banking Committee Chairman Mike Crapo’s (R-ID) decision to hold a hearing on the issue comes as a surprise. During an Independent Community Bankers of America conference in April, he said he couldn't promise his panel would hear the bill.
"As long as cannabis is illegal under federal law, it seems to me to be difficult for us to resolve this," Crapo said, according to Politico. "I cannot make a commitment as to whether we will take up legislation yet because we want to see how we can resolve this difference between criminal law and our financial law."
While larger banks have yet to step up and service marijuana businesses, a growing number of credit unions and community banks are entering the space.
As of March, 633 institutions in the U.S. are servicing the industry, an increase of 54% from the 411 recorded in the same period last year, according to the Financial Crimes Enforcement Network's (FinCEN) latest Marijuana Banking Update.
Rachel Pross, chief risk officer for Maps Credit Union, based in Salem, Oregon, is expected to testify Tuesday.
The credit union, which has been providing banking services to the marijuana industry since 2014, services about 500 marijuana business accounts, including retail dispensaries, producers, processors, wholesalers and laboratories.
Cash deposits from those accounts totaled more than $298 million last year, Maps said.
Garth Van Meter, vice president of government affairs for Smart Approaches to Marijuana, and John Lord, CEO and owner of LivWell Enlightened Health, are also listed as witnesses for the hearing.
Trade groups such as the Credit Union National Association and the American Bankers Association have expressed support for the SAFE Banking Act.
The hearing can be seen here.
The Senate version of the SAFE Banking Act (S. 1200), was introduced in April with 21 co-sponsors.