A National Credit Union Administration (NCUA) board member spoke on September 9 in Washington, D.C. at the Payments, Banking, Compliance in the Canna Industry (PBC) conference surrounding cannabis banking. Rodney Hood, a former chairman for NCUA and current board member, spoke over Congress’ cannabis inaction. NCUA is an independent federal agency which provides deposit insurance to credit unions. 

“Let me be clear about where I stand,” Hood said, according to his prepared remarks. “It is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses, so that this industry can take part in the legitimate financial services industry.”

Hood served the NCUA from 2005-2009 under the Bush administration. He then became chairman of the NCUA by former President Trump in 2019. In 2021, Hood transitioned from chairman to board member and remains active in NCUA as a whole. 

Plan of Action

“I’ve heard a variety of perspectives, but there’s one common refrain: they all agree that legalization is a matter of when, not if—and they urge federal action to get it done,” Hood told PBC Conference attendees. “Legalization in some form is going to happen, and the abdication of responsibility to address these issues in Washington is simply ludicrous. This is precisely the time we need leadership at the federal level to steer this ship in the right direction.”

Hood says the next steps towards cannabis banking and getting Congress to take action is to create an interagency group of federal financial regulatory agencies. This will help create a cannabis banking structure and framework that would address the continued cannabis problem the country faces. This framework would then be passed to Congress, who then need to vote on it and move legalization forward for both possession and banking. It’s the next logical step, Hood believes. 

SAFE Banking Act

There is currently a bill in Congress which would provide financial security for banks who partner with cannabis-related businesses. It’s called the SAFE Banking Act. First introduced in April, the bill passed the House. However, it has not made its way through any Senate committees or the full chamber. This lack of action is what Hood is referring to when discussing Congress’ inaction. According to Hood, the SAFE Banking Act is a good example of a proposal he says could improve the financial situation for institutions and clients. However, the Senate’s focus on broader reform is holding cannabis banking back from really helping people. 

“Here’s a basic reality,” Hood continued during the conference. “As a rule, regulators really don’t like to get out too far ahead of the policy process. We always seek to respect the existing statutes, and to defer to Congress as the policy-making arm of the government. However, there are times when an independent regulator in the executive branch needs to step forward to provide leadership, or at least nudge things along. I believe that’s the case today with marijuana and the financial services industry.”

Next Steps

Now, it’s up to lobbying, according to Hood. He promised at PBC that he would use his full capacity as an NCUA board member to lobby congress members. They needed to move the SAFE Banking Act forward. But it’s unclear what Congress will do next as their inaction on cannabis continues. As more information becomes available, we will update you with the latest. 

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