Oregon Gov. Signs Cannabis Bank Protection Bill

Oregon banks working with the cannabis industry have some new protections after Gov. Kate Brown signed House Bill 4094 into law April 4.

The law exempts institutions that “provide financial services to marijuana-related businesses, researchers and laboratories from any criminal law of this state…” according to the bill’s summary online. It removes criminal liability for banks in reference to any Oregon state statutes regarding working with legal cannabis businesses.

The law also calls for a study from the Department of Consumer and Business Services to evaluate and report on financial options for legal cannabis businesses  by January 2017. 

The law can’t do anything to protect banks against federal rules. It could, however, send a message about the state’s position, says the bill’s sponsor, Rep. Tobias Read.

“It makes no sense to say these businesses are legal on one hand and simultaneously on the other hand say that legal businesses don't have access to banking services," Read says in an Oregon Live article. "In the end, having an entire segment of the economy -- and a growing one at that -- based on cash is not good for anybody."

Though he’s glad it passed, the bill itself probably won't have much effect, says Vincent Sliwoski, a Portland lawyer specializing in cannabis.

“I think it’s mostly symbolic just because bank regulation is generally a creature of federal law,” he says. “Despite the fact that states say things like, ‘We’re not going to have our Department of Justice prosecute a bank for servicing a cannabis account,’ it doesn’t do much to help get around the strictures of federal regulation.”

One place that it could make a difference is smaller operators, he says. “I could see it encouraging a little, aggressive credit union-type bank that was looking for a place to get market share and was willing to take some risk.” Even if a bank was willing to be less risk-averse, obstacles like compliance regulation and federal liability would still make it challenging, he says.

“I think what this is is the state doing everything it possibly can do, but they’re working in a pretty narrow space because of federal law,” he says. “It’s showing support for the program, basically. But I think that until federal law changes, that’s it.”

Taylor West, deputy director of the National Cannabis Industry Association, says it remains to be seen if the bill can "have a substantial impact, absent federal action on the issue."

"State leaders like the ones in Oregon should be commended for making every effort to address the banking issue," says West. "But ultimately this is a result of an unsustainable conflict between state and federal law, and it’s long overdue for Congress to act. Bills like the one in Oregon ought to serve as a clear message to Washington, D.C., that it’s time for the politicians there to do their jobs and fix this untenable, unsafe situation."

The amended bill was passed by both the House and Senate in February.