Reefer Madness

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It’s becoming part of the holiday season ritual. With another Congressional cycle coming to a close, a deeply divided Congress rushes to put a spending plan in place replete with a smattering of unfinished business. Maybe this is the year that Congress finally passes legislation to allow credit unions and banks to provide banking services to marijuana related businesses and their employees in States where marijuana is legal. Common sense says it should, but experience says it won’t.

If my cynicism proves correct, Congress’ continued dithering puts even more pressure and responsibility on credit unions. The reality is that with 37 states in which marijuana is legal in some form, the question is no longer if your credit union is involved in marijuana banking, but how extensive is the involvement. The practical effect of Congress’ inaction is to make the business more expensive for smaller businesses that need capital and credit; and a compliance minefield for all but the largest and most sophisticated institutions that have the resources necessary to implement the proper framework for getting involved in an industry that remains patently illegal as a matter of federal law.