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Members of the Senate Banking Committee are gathering Wednesday to mark up the Secure and Fair Enforcement Regulation (SAFER) Banking Act – a move that is giving people some hope that legal clarity could be on the way for credit unions providing banking services to marijuana-related businesses.
Ahead of Wednesday's meeting, officials with NAFCU submitted a letter to committee members to highlight potential revisions to the bill to help credit unions.
In the letter, NAFCU Vice President of Legislative Affairs Brad Thaler said, "NAFCU supports the intent of this bill, but we are concerned that the new language in the base text could be read to dramatically increase regulators' authorities and discretion, which could have a significant impact on credit unions."
Thaler laid out what some of the "concerning" provisions could actually do to credit unions trying to serve marijuana-related businesses. Thaler's concerns included the following:
- Add regulatory burdens and regulator overreach, especially as it relates to ways in which financial institutions should engage with consumers to "increase access."
- Give financial regulators too much discretion in terminating a deposit account, which NAFCU said should only be based on violations of the law, unsafe or unsound practices, or violations of exam-related issues.
- Lead to varying notice requirements across the banking regulators.
Where marijuana use and sales are legal, Thaler added the financial risks are growing for those businesses. "NAFCU has heard from a number of our member credit unions in these states that their members are being approached by small businesses in the legal cannabis industry seeking financial services. The risks associated with a lack of access to financial services, including deposit accounts, are too high."
Wednesday's Senate Banking Committee hearing will be livestreamed and begins at 9:30 a.m. EST.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
