Credit Union Leagues Support New States’ Rights Marijuana Bill

Three credit union leagues are supporting a new bill introduced Thursday that would remove the threat of federal prosecution in states that have legalized recreational and medical marijuana use.

Senators Cory Gardner (R-CO) and Elizabeth Warren (D-MA) announced during a press conference they are co-sponsoring the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act of 2018, which received the backing of the Maine Credit Union League, the Mountain West Credit Union Association and the Cooperative Credit Union Association. The bicameral, bipartisan legislation was also introduced in the House by U.S. Representatives David Joyce (R-Ohio) and Earl Blumenauer (D-Ore.).

Forty-six states currently have laws that permit marijuana or marijuana-based products for either medical or recreational use.

The new bill amends the federal Controlled Substances Act so that its criminal marijuana provisions will not be applied or enforced in states that have legalized recreational and medical uses of cannabis. The bill also states that compliant transactions are not trafficking and do not result in proceeds of an unlawful transaction. Additionally, industrial hemp will be removed from the list of controlled substances under the CSA, if the bill passes Congress and is signed by the president.

What remains illegal under federal law, however, is selling pot to persons under 21 except for medical use, distributing cannabis at transportation safety facilities such as highway rest areas and truck stops, endangering human life while manufacturing marijuana and employing anyone under 18 in drug operations.

The CEOs of the Maine league and MWCUA co-authored and mailed a letter earlier in the week to Gardner and Warren that expressed their support the bill.

“As financial services providers serving over 4 million members in the states we represent, credit unions play a central role in our communities by fulfilling banking needs that may not be otherwise available,” said Scott Earl, MWCUA’s president/CEO. “The STATES Act would provide the certainty we need as financial services providers to service this growing industry and protect our members and the taxpayers of our states. This is a matter independent of the question of legalization of cannabis and is about ensuring the rights of states to fully implement the will of their voters.”

Todd Mason, president/CEO of the Maine league said the state’s credit unions cannot serve the marijuana industry that generates several billion dollars in sales and tax revenues without substantial risk because of the ongoing uncertainty over federal enforcement of the Controlled Substances Act.

“This has become not only a states’ rights issue, but an important public safety issue,” he said.

Mason noted that without access to standard banking services, some of these companies have had to come up with alternative solutions and many are unable to undertake the most basic functions of successful businesses, such as paying vendors, employees and taxes, but instead have large amounts of money unsecured, unaccountable and at risk for abuse.

Paul Gentile, president/CEO of the Cooperative Credit Union Association, also wrote a letter to Sen. Warren in support of the bill, noting that it would provide the framework for a safe and sound banking system.

“Your proposed legislation will help credit unions open the welcome door to both businesses and consumers as their volunteer board of directors may determine to be appropriate to meet the financial services needs of those most in need,” Gentile wrote. “You have consistently been at the side of credit unions in this debate, heard and understood our needs and acted with a true commitment to assist in compliance with law and improvements to access to banking services by marijuana businesses.”

In April, Gardner reported that President Donald Trump said he would support a “federalism-based legislative solution to fix this states’ rights issue once and for all.”

Gardner managed to get Trump’s commitment after he began to block Department of Justice nominees in response to Attorney General Jeff Sessions’ Jan. 4 rescission of the Cole Memo, which essentially lowered the risks from federal prosecution for financial institutions as long as they did not violate the memo’s top enforcement priorities.

Following discussions with the DOJ in February, Gardner lifted some of his holds on DOJ nominees, but kept the rest in place until he received Trump’s commitment in April that Colorado’s rights would not be infringed.

It is unknown whether President Trump will sign the proposed STATES bill if it is finally approved by Congress, however, because he has earned a reputation for frequently changing his mind on issues he previously supported, though he publicly favored states’ rights regarding the marijuana issue during the presidential campaign.