Senator Chuck Schumer, D-N.Y., recently brought up the idea of “safeguarding” marijuana banking during a Senate Banking Committee hearing and has vowed to continue to fight for the cause. Despite his enthusiasm, Schumer also put emphasized the need for bipartisan support in order to tackle this issue and make progress. From Democratic senators to banking institutions, let’s take a look at Schumer’s renewed push for marijuana banking reform.
1. Schumer Seeks Solutions to Banking Woes: ‘Safeguarding’ Cannabis
Senator Chuck Schumer has proposed a new set of solutions to the banking woes faced by the cannabis industry. He outlined the measures for protecting cannabis-related businesses, while opening up access to banking, in a recent statement.
The proposed plan includes:
- Instilling new standards of account compliance for protecting cannabis businesses from exploitation and dodgy dealings
- Increasing transparency by requiring that information from cannabis-related businesses is reported to FinCEN and the FBI
- Establishing safe harbor protections for legitimate businesses in the cannabis industry, to ensure they need not fear federal prosecution
Senator Schumer hopes that this plan of action can help to mitigate the current banking issues and open up the sector to more financial freedom. He believes that this would make the cannabis industry a viable place to work and do business, resulting in more economic circulation.
2. Urgent Need for Bipartisan Support in ‘Safeguarding’ Cannabis Banking Efforts
As legislative efforts for the Safeguarding of cannabis banking continue, both parties acknowledge the urgent need to secure bipartisan support. Currently, state-licensed marijuana businesses are forced to operate as cash-only companies, a situation that results in both legal and financial risks.
At present, no federal protections exists, leaving businesses vulnerable to financial regulation violations and robbery. Lawmakers on either side of the aisle recognize the need to do more, and the options on the table include:
- Bio-metric authentication systems including eye scans and fingerprints
- The legalization of banking services for particular cannabis businesses
- Establishing a federal regulatory framework for cannabis banking efforts
Despite having reached a bipartisan agreement on safeguarding the cannabis banking efforts, much work still needs to be done. From creating bills that support banking services to helping businesses understand the constantly shifting regulations, legislators have their hands full. Although it might outrage a few of their constituents, they must immediately develop initiatives that will provide state licensed marijuana businesses with a secure and reliable means of operating.
3. Breaking Down the Benefits of a “Safeguarding” Approach to Cannabis Banking
When it comes to cannabis banking, the safe approach of safeguarding is the optimal way to banking securely. Here are some of the main reasons why:
- Increased security: A safeguarding approach to cannabis banking requires all of the involved parties to keep up-to-date on banking protocols and regulations. This method of securing banking transactions ensures that information is properly safeguarded and that transactions remain secure at all times.
- Secure supply chain: A safeguarding approach to cannabis banking requires businesses to track their supply chain from seed to sale. This allows businesses to ensure that the products they are selling are safe to consume, as well as ensures the integrity of the entire chain.
- Financial integrity: By requiring businesses to adhere to banking laws and regulations, they are able to keep their financial information safe and secure. This ensures that the financial integrity of the business is protected regardless of industry.
Furthermore, a safeguarding approach to cannabis banking helps to protect businesses and consumers alike. By adhering to banking regulations, businesses can remain compliant with the law. Additionally, the fact that customer information is properly safeguards means that customers can have total confidence in the quality of their cannabis product.
4. What the Future Holds for ‘Safeguarding’ Banking of Cannabis
The cannabis industry is set to see tremendous growth in the coming years, with the development of banking solutions for cannabis companies being a key part of this growth. Today, many cannabis businesses are forced to operate on a cash-only basis due to federal regulations. This creates numerous potential risks, from robbery to money laundering. It also places significant burdens on businesses, as cash is harder to track and harder to securely store.
The good news is that the banking industry is taking steps to address this issue. Financial institutions are working to develop practices to ensure that banks can offer services to cannabis companies without risking violations of federal money laundering laws. Moreover, banking institutions are working to provide additional services such as payroll solutions and investment options to the cannabis industry. Banks are also committing to hiring cannabis professionals with accounting and finance backgrounds to help them better understand the burgeoning industry.
- Investment Opportunities: Banks will provide additional services, such as investment options, to cannabis industry.
- Payroll Solutions: Banks are working to provide cannabis companies with more secure payroll solutions.
- Federal Money Laundering Provisions: Financial institutions will develop practices to help cannabis businesses comply with federal money laundering laws.
Since the cannabis industry is growing so rapidly, continued innovation in the banking space is essential to ensure that cannabis businesses can continue to lawfully operate and benefit from banking solutions. The future of the banking industry and the cannabis industry is interlinked, and the continued development of best practices will be key to ensuring that the industry can thrive and remain compliant with the law.
In sum, Senator Schumer’s proposed legislation would provide an invaluable lifeline to cannabis businesses facing an uncertain future while protecting customers against potential fraud or abuse from banks. Whether the legislation will come to fruition remains to be seen, but one thing is for sure: If it is to gain any traction, a unified voice both from the Democratic and Republican parties is essential.