The National Association of State Treasurers (NAST) reaffirmed its support for the SAFE Banking Act, which would grant marijuana companies access to traditional banking services.
Though NAST does not take a position on cannabis legalization, the bipartisan treasurers support legislation to fix the cannabis banking problem stemming from federal prohibition, reported Marijuana Moment.
"During today’s State Treasurers Annual Business Meeting, state treasures from across the country agreed to renew a resolution on advancing legislation allowing legal cannabis states the ability to safely participate in the national banking system," tweeted the WA State Treasurer. "Safe Banking Act must pass!"
What Does The Updated NAST Resolution Say?
The section of the updated resolution, which was originally adopted in 2019, reads that there’s an “ongoing conflict between states’ laws legalizing cannabis and current federal laws, resulting in the vast majority of financial institutions refusing to provide banking services to legal cannabis businesses.”
Cannabis businesses frequently operate on a cash-only basis, due to the limited access to traditional financial systems, which the association called “inefficient, expensive, and opaque, making the illicit activity more difficult to track and posing a significant risk to public safety by increasing the likelihood of violent crime. The inability to access banking services impacts not only legal cannabis businesses but also employees in the cannabis industry and secondary service providers who contract or do business with cannabis businesses.”
A new line added to the 2022 version of the resolution also notes that “states must collect fines, fees, and taxes from state legalized cannabis-related businesses.”
NAST resolved that it supports “common sense federal laws and regulations to provide essential banking services to state legalized cannabis businesses, promote public safety and financial transparency, and facilitate local, state and federal tax and fee collection without compromising federal enforcement of anti-money laundering laws against criminal enterprises.”
Cannabis Banking Expert Weighs In
Robert Baron, an expert in cannabis banking and a Certified Anti Money Laundering Specialist (CAMS), told Benzinga that SAFE Banking legislation is the wrong solution for the right problem. He said a simple solution to support cannabis banking would be to update the guidance that underpins the ability to bank cannabis that was issued in 2014 by the Financial Crimes Enforcement Network (FinCEN), a division of the US Treasury Department.
“This will empower bankers to leverage advanced technology and automation while preserving limited and valuable resources to conduct effective Anti-Money Laundering (AML) due diligence that mitigates the real risks posed to the U.S. financial system by bad actors and illicit finance schemes," said Baron who is also the chief experience officer at StandardC.
“By eliminating useless regulatory requirements (i.e., Marijuana Limited SARs) and supporting the adoption of new data-driven automation and technology, financial institutions can achieve efficiencies to ensure that banking cannabis can be a sustainable endeavor," Baron said. “This will increase the availability and lower the cost of banking options for the cannabis industry by reducing the compliance costs of banking cannabis.”
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