Are We Getting Closer To Legalizing Cannabis Banking?

June 12, 2018 at 8:36 am Leave a comment

Image result for marijuana bankingA dogs and cat coalition with supporters on both ends of the political spectrum may be coalescing around a proposal that would provide a framework for credit unions and banks to provide marijuana banking service without fear of violating federal law.

Under a proposal put forward by Senator Cory Booker of New Jersey and Elizabeth Warren of Massachusetts ‘‘Strengthening the Tenth Amendment Through Entrusting States Act’’ or the ‘‘STATES Act’’. it would be legal as a matter of federal law to sell, possess and distribute marijuana in states where it is legal to do so. This would presumably provide both banks and credit unions the green light to provide banking services to marijuana businesses. It would also presumably eliminate the opposition of at least some Federal Reserve banks to processing transactions for banks and credit unions offering these services.

There are few things that New York Governor Andrew Cuomo and President Trump agree on these days but in separate statements they have both indicated that they support the legislation. Specifically Governor Cuomo signed onto a joint letter with several Governors which complained in part that “current federal law precludes banks from engaging with legal entities that are complying with state laws. As a result, these companies are forced to become cash-only businesses, creating unnecessary burdens and risks.” This is a big development coming from a Governor who has taken a very cautious approach to the legalization of marijuana.

As for President Trump, before heading to Canada to see how many erstwhile American allies he could antagonize prior to  embracing North Korea’s dictator, he told reporters that he would “Probably end up supporting” the Booker/Warren proposal.

Wells Bans Credit Card Purchases of Crypto Currency

This one is getting a lot of attention this morning. $2 trillion asset Wells Fargo became the latest of the behemoths to ban their credit card holders from using their credit cards to make transactions at crypto currency exchanges and brokerage firms. Wells explained that it is making the decision in part “due to the multiple risks associated with this volatile investment.” JP Morgan Chase, Bank of America and Citi Group have already made similar announcements.

Entry filed under: General, Legal Watch. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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