Read more at the Washington Credit Union Daily
National Credit Union Administration Board member Rodney Hood on Thursday called on federal banking regulators to begin developing a joint principles-based approach to marijuana banking.
“It is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses so that this industry can take part in the legitimate financial services industry,” Hood told a conference on “Payments, Banking, Compliance in the Cannabis Industry.”
Hood said the Federal Financial Institutions Examination Council (FFIEC) should take the lead in developing a uniform cannabis banking regulatory regime.
NCUA Chairman Todd Harper became chairman of the council on April 1 and will serve as head of the council for the next year.
Hood also called on Congress to enact marijuana banking legislation. The House has passed a bill that would give financial institutions a safe harbor if they provided services to cannabis businesses. However, Senate Democratic leaders have said they will consider cannabis banking legislation only if it is included in a larger marijuana legalization bill.
Regulators should not wait, Hood said.
“There are times when a regulator in the executive branch needs to step forward to provide leadership, or at least nudge things along, when the policy process isn’t working as it should,” Hood said. “I believe that’s the case today with marijuana and the financial services industry.”
Hood said that data from the Treasury Department’s Financial Crimes Enforcement Network showed that at the end of 2020, there were only 515 banks and 169 credit unions providing services to marijuana businesses and complying with FinCEN rules.
“That’s a tremendous opportunity that brings tremendous challenges – but it requires leadership to get it done,” Hood said. “And continued inaction, just allowing a patchwork of ad hoc state solutions to take effect, is not my idea of leadership.
Hood has said in the past that he believes it is a business decision for a credit union if it wants to accept deposits from marijuana-related businesses, as long as the credit union follows Anti-money Laundering and Bank Secrecy Act rules.