The Los Angeles City Council voted today in support of federal legislation that would prohibit banking regulators from punishing a financial service provider for doing business with a state-compliant cannabis business, a move that comes as the panel is exploring the creation of a municipal bank that could serve the cannabis industry.
The federal government still considers marijuana a Schedule I drug under the Controlled Substances Act, and as a result most banks are hesitant to take on cannabis businesses as clients for fear of violating federal laws.
The SAFE Banking Act is a U.S. Senate bill that would prohibit federal banking regulators from altering an institution’s deposit or share insurance solely for lending to a marijuana-related business, or otherwise discouraging institutions from offering financial services to marijuana businesses.
The bill would also prevent corrective supervisory action on a loan solely because it was given to a marijuana-related business, and would protect an institution from forfeiture for working with such businesses.
The resolution was approved on a 12-0 vote.