Monday, June 17, 2024

Financial Regulator Calls Lack Of Banking Access In Cannabis A Serious Market Failure

Federal financial regulator Rodney Hood noted that marijuana legalization “in some form is going to happen, and the abdication of responsibility to address these issues in Washington is simply ludicrous.”

By Nicolas Jose Rodriguez

During an interview with PBC Conference that was released on Wednesday, Federal financial regulator Rodney Hood, a board member of the federal National Credit Union Administration (NCUA) said marijuana legalization is not a question of “if” but “when,” reported Marijuana Moment.

In conversation with Josh Radbod, CEO and co-founder of the PBC Conference, a B2B conference for payments, banking, and compliance in the cannabis industry, Hood talked about the “prohibition mindset” that has influenced banking activity and said there is an opportunity for rural communities in cannabis, which could be facilitated by modest reforms in Congress to protect banks from being penalized.

cannabis banking
Photo by Darren415/Getty Images

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He argued in favor of passing the SAFE Banking Act to build much-needed infrastructure. In the meantime, Hood said credit unions “must embrace the cannabis-related businesses.”

A Serious Market Failure

In a press release by the NCUA prepared for the conference, Hood noted that marijuana legalization “in some form is going to happen, and the abdication of responsibility to address these issues in Washington is simply ludicrous.” He described the “explosive growth of the state-legal cannabis industry over the last decade,” as a “remarkable social and cultural change that has taken place right before our eyes, and it’s only going to continue to develop over the coming years.” At the same time, he noted that “federal law surrounding marijuana and cannabis-derived products have barely changed.”

According to Hood, these limitations have reduced the development of the banking infrastructure needed to provide financial services to this rapidly growing industry.

How Long Before The Senate Approves The SAFE Banking Act?
Photo by Kindel Media from Pexels

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“The NCUA regulates the system of federally insured credit unions, which includes more than 5,000 institutions. Yet, only 169 of those are providing services to one of the fastest-growing industries in the nation. That can only be described as a serious market failure,” Hood explained. “It is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses so that this industry can take part in the legitimate financial services industry.”

This article originally appeared on Benzinga and has been reposted with permission.


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