A bill that would help banks serve the cannabis industry is on its way to the Senate floor. But it faces huge political challenges on the right and the left. So what’s at stake? If the bill stalls, will marijuana businesses — at least those legalized by the states — have to live without bank accounts? Not necessarily. Hundreds of banks have already been serving marijuana businesses over the last several years, according to FinCEN data that indicates the total is more than 670 banks and credit unions. They range from community lenders to mid-sized institutions, including Valley Bank, which has $64 billion in assets and says it serves dispensaries, cultivators and testing labs. FinCEN, which enforces anti-money laundering rules, gave banks guidance on working with the industry in 2014. “There’s absolutely no reason why somebody [in the cannabis industry] who wishes to have a bank account can’t have one,” said Nathaniel Gurien, founder of Fincann, a consulting firm that connects the cannabis industry to financial services providers. But even if the bill becomes law — a big if, for reasons we outline further below — it may not be enough to attract a rush of new lenders, either — in particular the biggest banks. Safe Harbor Financial CEO Sundie Seefried, whose firm helps banks with cannabis regulatory compliance, pointed to continuing anti-money laundering obligations under the Bank Secrecy Act. “That’s what really is an elephant in the room,” Seefried said. She still wants Congress to pass the bill because it would codify protections for the cannabis industry and banks that work with it. The biggest banks are unlikely to get into cannabis until the drug is legal at a federal level. “With federal illegality, it’s a high-risk banking category with its own eccentricities and requirements,” Gurien said. The big banks are “going to look at it and say, ‘This is not a big enough sector for us to want to make the commitment institution-wide,’” he added. For now, the banking and cannabis industries will keep fighting for legal clarity. It’s not just a business concern for bankers. A big driver of the legislation is that the current federal-state disconnect leaves marijuana shops as targets for theft if they can’t get bank accounts and are stuck transacting with piles of cash. “This urgently needed, bipartisan legislation will resolve the ongoing conflict between state and federal law so that banks can serve state-authorized cannabis and cannabis-related businesses while enhancing public safety, tax collection and financial transparency,” American Bankers Association president and CEO Rob Nichols said. “The status quo is simply untenable for consumers, small businesses and banks operating in states where cannabis is legal.” It’s Thursday — Send tips: Zach Warmbrodt, Sam Sutton.
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