The bill sits in an evenly divided Senate now under the slim control of Democrats who need to decide whether to push forward with the bill, pursue outright marijuana legalization or couple the issue with broader criminal justice reform.
“Chances are good, except if they decide they want to go for the more aggressive legislation,” Tierney said.
Since marijuana remains illegal at the federal level — despite legalization in some form in 38 states, including Michigan for medical and recreational use — banks and credit unions involved with the industry must comply with rigorous requirements.
“There are a lot of banks that don’t want to regardless of whether it’s legal,” Tierney said.
In Michigan last year, medical and recreational marijuana generated $984.7 million in sales, according to the state Marijuana Regulatory Agency.
More credit unions would like to serve marijuana-related businesses if the SAFE Banking Act passes, Michigan Credit Union League CEO Patty Corkery said.
“The appetite is definitely there because it’s what their communities are demanding and what their businesses are demanding.
The financial institutions that serve the marijuana industry do so under 2013 guidance from the Financial Crimes Enforcement Network, or FinCEN, an organization in the U.S.
The bank also heard from state regulators and local elected officials who worried about the public safety aspects of purely cash businesses.
This is something we’re hoping to continue to grow, not only in the state of Michigan, but with our partners that are going to grow into other areas, and we want to continue to grow with them and to offer them the service.
In a recent survey by the industry trade publication Bank Director, just 7 percent of responding CEOs, directors and chief risk officers said their bank presently serves marijuana businesses.
attorney decides to prosecute a local marijuana business, a bank could lose all of the collateral that backs the company’s loan, Tierney said.
While passage of the SAFE Banking Act in the Senate — and President Biden’s signature — could bring more and larger institutions into the fray, the high level of due diligence, report requirements scrutiny, compliance costs and risk would remain.
The law could bring not only competition, but players that would not “operate in a way that’s going to be in the best interests of everything that we’re doing” and cause problems for the entire industry, he said.