SAFER Banking Act Gaining Traction, NAFCU Shares Concerns to Help CUs

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.