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US: Cannabis central to debanking conflict

With a Senate committee set to take up the issue of debanking next week, congressional researchers have released a report detailing the subject—while making a point to address how the marijuana industry's financial services access problem "sits at the nexus" of a state-federal policy conflict that complicates the debate.

The Congressional Research Service (CRS) analysis explains the reasons a bank might terminate a given account, including the suspicion that the client is engaged in illegal activity. And for companies working in or around the cannabis industry in a state that has legalized it, the bank's risk assessment is often influenced by the fact that marijuana remains federally prohibited.

"Although most banks are state-chartered, every federally insured bank has a primary federal regulator, and generally these regulators expect banks to avoid banking with clients that violate federal law," CRS said. "One example is cannabis businesses."

"Cannabis is legal in several states but is banned at the federal level. Thus, a bank chartered in a cannabis-legal state may be in a position to provide banking services to a company operating legally under state law, but it could potentially violate federal law," it says. "Thus, banks may choose not to bank with companies in industries that are legal only at the state level due to potential bank exposure to legal risk."

Read more at Marijuana Moment

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