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Cannabis banking
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Federal and state laws continue to conflict, regarding legality of cannabis use and sale. That also means that it remains illegal at the federal level for banks to serve businesses working directly and indirectly with the cannabis industry.

There are two bills most prominently mentioned as potential solutions to the challenge - both spearheaded by Colorado legislators in Congress. Both are supported by the Colorado Bankers Association.

• The SAFE Banking Act (H.R. 1595) sponsored by Representative Ed Perlmutter (D-CO) and Senator Jeff Merkley (D-OR), respectively. This bill would provide a safe harbor by makinga variety of changes to federal law in order to allow banks to serve cannabis-related legitimate businesses in states where the activity is legal. The legislation has 206 cosponsors.

STATES Act (S.1028) introduced by Senators Elizabeth Warren (D-MA) and Cory Gardner (R-CO). The bill provides that when possession or distribution of marijuana is legal under state or tribal law, that activity is exempt from restrictions and penalties of the Controlled Substances Act (CSA). The legislation has 10 cosponsors. page 2 A Comprehensive Solution would incorporate elements from both of these legislative proposals, as well as require guidance from FinCEN regarding the treatment of legal v. illegal cannabis activity, and exam procedures for cannabis accounts from federal banking regulators.

In March 2020, while he took no policy position, Treasury Secretary Steven Mnuchin told lawmakers that the cash-only legalized marijuana industry is presenting a challenge for the Internal Revenue Service as he also fielded other questions about banking issues with the growing industry.

Meanwhile, Senate Banking Committee Chairman Mike Crapo (R-Idaho) has expressed reservations about the SAFE Banking Act, which was passed by a strong bipartisan vote in the House earlier this year. In a statement, Crapo said he had "significant concerns" about the bill, particularly related to public health and safety, legacy cash, money laundering and interstate commerce and banking, and asked for public feedback on how to best address these issues.


Industrial hemp was legalized federally by the 2018 Farm Bill. That means banks will no longer be required to file suspicious activity reports for customers involved in hemp cultivation. "Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations," the agencies said. "For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants."

States across the country are now establishing regulatory schemes for hemp production. The job aid is an examiner reference tool providing background as well as state-specific information, such as legalization status and related topics, on both hemp and marijuana.

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Colorado Bankers Association
One Sherman Place
140 East 19th Avenue, Suite 400
Denver, CO 80222
Tel: 303.825.1575
Fax: 303.825.1585

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