West Virginia credit unions await cannabis banking fix
West Virginia’s long and winding road to having a viable medical cannabis program may be lurching closer to reality as the state legislature is attempting to clear the way for credit unions to accept funds for license fees.
The Mountain State’s legislature passed a bill two years ago authorizing the use of medical cannabis. That law is scheduled to go into effect July 1, but earlier this year the only financial institution used for all state funds said it was unwilling to accept any money from legal cannabis businesses due to the conflict with federal law. Although marijuana has been legalized for either medical or recreational use in 33 states plus the District of Columbia, it remains illegal on the federal level.
Despite having no official position on the issue, the West Virginia Credit Union League got involved in the response to a recent bill that would add to the list of parties able to accept payments.
“The new bill will allow credit unions and non-bank depository institutions to bid on the business, and we are in support of anything that allows credit unions to be at the table same as any other financial institution,” WVCUL President and CEO Ken Watts told Credit Union Journal. “There was some confusion early on, which is why we got involved. Some people were saying credit unions could accept funds because their regulations are different. We wanted to make sure it was understood credit unions have the same regulatory scrutiny as other financial institutions.”
The bill has been passed by both the state house and the senate. Watts said Gov. Jim Justice has not yet signed the legislation.
“The governor indicated he wanted a banking fix and thought this was it, so all indications have been he will sign,” Watts assessed. “It would allow credit unions to bid on the business the state would be entering into, when the state collects fees for licenses and such. Credit unions would have to be approved by the state treasurer’s office, but the key element is, this new law would make them eligible.”
Despite that progress, Watts said he does not know of any credit unions that are interested in pursuing the business at this time.
“There might be some, but we have not been in direct contact with any that have expressed interest,” he said. “The ambiguity between state law and federal law is a concern that credit unions would have to consider. My staff and I have been working on this issue, but we do not have an official position. We just want to make sure credit unions understand the compliance issues.”
Several moves are underway in Congress to normalize cannabis banking on the federal level. Rep. Ed Perlmutter, D-Colo., has made several attempts to introduce legislation to allow FIs to provide financial services. Earlier this week, Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, scheduled a vote on the Secure and Fair Enforcement — or SAFE — Banking Act.