Treasury Secretary Steve Mnuchin has made statements before supporting the idea of banking solutions for state legal cannabis businesses. But, now an amendment to a controversial bill that would overturn many Dodd-Frank Act restrictions may open the door for banks to feel more comfortable accepting funds from marijuana companies.
The cannabis industry is flush with cash, literally. Many cannabis companies do not know what to do with their cash and seek alternative investments since most financial institutions are too afraid of federal repercussions should they allow deposits and withdrawals from a cannabis business. A group of bipartisan senators are looking to change that though by sneaking an amendment into a bill that many politicians desperately want approved to overturn Dodd-Frank restrictions.
The measure, led by Sens. Jeff Merkley (D-OR) and Lisa Murkowski (R-AK), would prevent federal officials from punishing a financial service provider “solely because the depository institution provides or has provided financial services to a cannabis-related legitimate business.”
It is an amendment to a larger bill being considered on the Senate floor this week that would remove some restrictions that were enacted on financial institutions as part of the 2010 Dodd-Frank Act.
Despite a U.S. Department of Justice move in January to undo protections for state marijuana laws, a top Trump administration official has repeatedly indicated he wants to solve cannabis businesses’ banking access problems.
Treasury Sec. Steven Mnuchin, in an appearance before a House committee last month, testified that the issue is at the “top of the list” of his department’s concerns.
The stock market is sitting near all time highs and overturning Dodd-Frank restrictions would allow banks and financial institutions to go back to the risky sort of leveraged vehicles that ultimately led to the crash of 2008. Marijuana companies may feel a level of comfort being able to deposit funds in a bank, however at points in 2008 there were concerns of a run on banks occurring. The government stepped in at that time to stave off those concerns, but in another similar scenario, cannabis companies may not be so happy to have deposits in banks that are suddenly filing for bankruptcy.