California state Treasurer John Chiang’s working group on cannabis banking held a public meeting to address the cannabis industry’s lack of access to the banking system. The meeting was a unique opportunity for candid feedback from the banking community on the federal barriers between the banking and cannabis industries.
Julie Robinson, Senior Vice President at River City Bank in Sacramento, provided a detailed explanation for her bank’s decision to withhold its services from companies who handle cannabis. Robinson claims it is too difficult for banks who hold deposits for cannabis businesses to comply with the U.S. Treasury’s Financial Crimes and Enforcement Network. According to Robinson, the FDIC is signaling to banks that it is obligated to enforce federal law which labels cannabis a banned Schedule I drug. Robinson’s remarks were followed by David Haithcock, Executive Director of the California Community Banking Network. Haithcock indicated his members were interested in providing banking services to the cannabis industry, but the risks are too great.
According to a statement by Rep. Dana Rohrabacher (R-Huntington Beach), the best approach for a banking solution is to target Republicans in Washington, where cannabis banking bills are stalled in Congress. Building a coalition in the legislature is critical for an industry that is facing an unfriendly administration. Under the Trump administration, the cannabis industry will struggle to expand access to the banking system without passing legislation that provides legal protection for depository institutions that offer financial services for cannabis businesses. Several weeks ago, the RCRC Board of Directors voted to support H.R. 2215 by Rep. Ed Perlmutter (D-Colorado) to liberalize federal banking laws with respect to cannabis.