Rory Savatgy

California Bill Would Create Limited-Service Canna-Banks

A bill proposed in California would create limited-service banks and credit unions to serve the state’s cannabis industry, according to a CNBC report. The measure, approved unanimously by the Senate Bank and Financial Institutions Committee, would allow canna-businesses to write special checks to pay some of their business expenses.

What would the program look like? The limited-charter financial institutions would be overseen by the Department of Business Oversight. The special checks could be used to pay local and state taxes, rent on property associated with the businesses, vendors, and could be used to buy state or local bonds and warrants. The checks would not be in the automated clearinghouse, part of the federal checking system.

Thomas Dresslar, the deputy commissioner for the Department of Business Oversight, said the agency is not taking a position on the measure, but “are trying to be helpful” to Sen. Robert Hertzberg, the bill author.

“It’s a public safety and worker safety problem. It’s a real issue and it’s a real problem.” – Dresslar to CNBC

In 2015 – prior to recreational cannabis legalization in the state – Fiona Ma, a member of the state Board of Equalization, penned an op-ed in the Huffington Post calling for the state to establish “a state-chartered depository institution” to serve the industry. California Attorney General Xavier Becerra was also one of the signatories on a letter sent to Congress earlier this year urging them to allow canna-businesses to “bring that commerce into the banking system.”

The California State Treasurer’s Office also has no position on the legislation but indicated they have been studying the potential creation of a state bank to serve the space.

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