While 47 states have some form of state-licensed cannabis or marijuana, federal law still makes it dicey for banks to handle money from the legal trade and V.I. banks continued to voice the same concerns at a recent V.I. Banking Board meeting chaired by Lt. Gov. Tregenza Roach.
With a new V.I. medical marijuana law on the books and awaiting implementation, board members asked about banks’ ability to accept as deposits, proceeds from the sale of legal marijuana. According to a statement from Government House, the banks all expressed concerns about federal statutes and Federal Deposit Insurance Corporation regulations which do not allow for the acceptance of such deposits or proceeds from marijuana-related businesses. As a result, some of the senior managers said their organizations have been lobbying Congress for a type of dispensation that can allow for the proceeds to be banked in states which have legalized cannabis in some form.
“Overall, the banks were all excited about the state of the economy and the opportunities that can arise from increased capital coming into the territory. On behalf of the Banking Board, I would like to thank all bank representatives in attendance at Tuesday’s meeting for their time and detailed reports. I look forward to a continued productive dynamic between the Banking Board and all financial institutions in the territory,” Roach said in a statement.
V.I. banks raised similar concerns after their February meeting and it has been a concern for banks around the nation.
Since then, bills have been proposed in both the U.S. House of Representatives and the U.S. Senate to address this concern. The one in the Democratic-controlled House is expected to pass without much difficulty. The one in the GOP-controlled Senate is less certain. While a majority of voters in both parties now favor legalization, many news outlets report that some senators are wary of taking a public position.
President Donald Trump has been unclear on where he stands on this issue, making statements in support of medical marijuana while on the campaign trail yet taking some actions, suggesting a potential future crackdown.
The American Banking Association has called for reform of the banking laws too.
“ABA believes the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use. Those banks, including institutions that have no interest in directly banking marijuana-related businesses, face rising legal and regulatory risks as the marijuana industry grows,” the ABA’s statement on the question said.
“Current proposals in both the Senate and the House that seek to provide greater clarity and bridge the gap between state and federal law provide a solid starting point for discussion,” the ABA said in its statement.
At the V.I. board meeting, representatives from Banco Popular, Bank of St. Croix, Firstbank, Merchants Bank, and Scotiabank presented a “State of the Bank” summary report.
“The reports that were shared with the board all painted an optimistic outlook for the territory’s economy and reaffirmed each financial institution’s commitment to the Virgin Islands community,” Roach said in a statement.
Roach raised the issue of concerns regarding the need for faster loan approvals, specifically in the instances of mortgages. Inquiries were made to each bank pertaining to improvements made to their infrastructure and other areas such as communication to prepare for storms. The matter of providing access to their respective banks and the availability of cash in the event of a disaster were also discussed, according to Government House.