United States: banking legislation for cannabis companies to be adopted before the end of October?

Rob Nichols, president of the American Bankers Association (ABA), expects the House of Representatives to pass legislation allowing banks to serve legal cannabis businesses by the end of October.

In a podcast published on Friday, the president of the ABA said that his group was working on the transition from the bipartisan banking and cannabis bill which would clarify the conditions under which financial institutions work with cannabis companies. The latter fear being exposed to the wrath of the federal government if they touch assets linked to a federally non-legal industry.

A bipartisan bill in the Senate

In particular, Rob Nichols emphasized the bipartisan nature of the Safe and Fair Banking Act (SAFE), which currently has 206 cosponsors in the House, including 26 Republicans.

«This is a bill that has already passed the House Financial Services Committee at the beginning of the calendar year by a considerable margin, and it's something that I predict...as early as September, probably October at the latest, will pass the House of Commons by a bipartisan majority, it's very exciting,» he said.

Nichols acknowledged that there was «more work to be done» in a Republican-controlled Senate, but noted that there are «33 states where it's legal [for medical or recreational purposes], so a lot of Senators have already had feedback from constituents about these challenges in those states.»

He also referred to Treasury Secretary Steven Mnuchin's comments calling for a legislative solution to the banking problem. He said that members of the federal regulatory community have let the ABA know «the panic in which the banks find themselves» and that «this requires legislative change».

«We look forward to the passage of the SAFE Act in the House,» he said, adding that the bill's sponsor, Representative Ed Perlmutter (D-CO), was a strong supporter of the legislation.

Hearings held this year by the Financial Services Committee and the Senate Banking Committee show that «legislative authorities in the jurisdictions recognize that this issue needs to be discussed,» Nichols said.

«We're delighted that there's an opportunity to make this happen. We're going to be very supportive,» he said. «Again, we understand the cultural, social and moral implications of this issue, but we need to clarify federal rules so banks know who they can and can't lend money to.»

Crucial to the industry

Earlier in the interview, ABA executives joked that he never imagined he'd be championing cannabis legislation when he started as the organization's CEO three and a half years ago.

«I would have said, »I don't think so, my friend. I don't see that in my field of expertise, but apparently it's true,» he said.

With a majority of states having passed cannabis legislation, he said bank access to cannabis was «critically important» and would be «the central issue» for the ABA when lawmakers return from their summer recess.

The ABA has also sought clarification at the federal level on banking rules for hemp and CBD businesses since the lfederal government to equalize this culture.

The relevant podcast can be listened to below, starting at 10 minutes for the passage on banking legislation for cannabis.