Congress, Not Regulators, Must Solve Marijuana Banking Problem: Mnuchin
Mnuchin says Congress alone can make it easier for cannabis-related businesses to do their banking.
Congress, not federal regulators, must fix the marijuana banking conundrum, Treasury Secretary Steven Mnuchin told a House subcommittee last week.
“I don’t believe that this is a failure of the regulators,” Mnuchin told the House Financial Services Appropriations Subcommittee, adding that he would encourage Congress to help solve the problem.
Mnuchin’s comments came, as a bipartisan group of senators introduced their version of cannabis banking legislation.
Credit union officials have complained that they take a significant risk if they provide financial services to marijuana-related businesses, even in states where cannabis is legal. They say that because marijuana is illegal on the federal level, financial regulators could impose sanctions on them if they serve cannabis-related businesses.
“This creates a significant conflict,” Mnuchin said.
Mnuchin said that Congress alone can make it easier for cannabis-related businesses to do their banking.
“There is not a Treasury solution to this,” he said. “There is not a regulator solution to this.”
However, when asked that should be done to solve the problem, Mnuchin said, “We’re not taking s policy position on this.”
Several lawmakers have introduced legislation that attempts to address the problem.
The House Financial Services has approved legislation that would provide financial institutions with a safe harbor from regulatory penalties if they do business with marijuana-based businesses in state where cannabis is legal.
A group of senators led by Sens. Jeff Merkley (D-Ore.) and Cory Gardner (R-Colo.) have introduced a Senate version of the bill. The legislation has 21 co-sponsors—14 Democrats, five Republicans and two independents.
“Forcing legal businesses to operate in all-cash is dangerous for our communities,” said Merkley. “It’s absurd that cannabis business owners in Oregon have to shuttle around gym bags full of cash to take care of their taxes or pay their employees.”
He said the issue is a public safety problem.
Gardner agreed.
“Conflicting federal and state marijuana laws make it difficult for legitimate businesses to use the basic financial services they need access to, and this bipartisan legislation gives them that access they need,” said Gardner.
The Democratic-controlled House may be able to pass marijuana legislation, Senate Republicans have been reluctant to consider such measures in the past.