The SAFE Banking Act would protect banks and credit unions in cannabis
PayPal, Inc. has its eye on pot payments. The payments processor recently joined the growing number of companies, municipalities and others lobbying Congress to approve cannabis banking legislation.
The San Jose, Calif.-based financial technology and small business lending company— which more typically lobbies on issues like mobile banking, transaction fees and international trade—added pot banking in its first quarter 2019 lobbying report.
PayPal’s foray into lobbying on the SAFE Banking Act is a signal that mainstream financial services companies are eager to to start doing business with the cannabis industry—and are willing to pony up to get the legislation through Congress.
The SAFE Banking Act would protect banks and credit unions that provide services to the cannabis industry from enforcement actions by federal regulators. Though legal in many states, marijuana remains illegal at the federal level and pot-related financial transactions require extensive reporting and other requirements under the Bank Secrecy Act and anti-money laundering statutes.
The legislation (H.R. 1595, S. 1200) would also make sure that new banks that want to work with the industry aren’t denied charters, deposit insurance or other tools necessary to conduct the business of banking.
More than 20 groups are lobbying on the issue, according to first quarter 2019 lobbying disclosures. Some are newly formed coalitions of cannabis industry startups and investors, while others include well-established labor unions, and state credit union organizations in California, Michigan, New York and Pennsylvania. The American Bankers Association, which represents some of the largest players in financial services, is also part of the lobbying effort.
More firms may leap into lobbying in coming months for an opportunity to bank the cannabis industry, which projected to reach $80 billion in annual sales by 2030, according to equity research firm Cowen Inc.
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