Creating a statute to allow Wisconsin banks to take on customers in the marijuana business would provide clarity for the state’s financial institutions.
It’s now unclear if a Wisconsin bank could take on an Illinois marijuana dispensary as a customer, for example, explained Wisconsin Bankers Association COO Mike Semmann and WBA Legal Affairs Director Scott Birrenkott.
Semmann described it as “highly complex, highly risky … and not necessarily in the financial institution’s best interest” to take on a marijuana business in Wisconsin because marijuana is illegal in the state.
A statutory change in Wisconsin would give banks the certainty to answer if it’s legal to bank a customer in the marijuna business, Birrenkott added.
Rep. Terry Katsma, R-Oostburg, asked what impact legalizing marijuana would have on Wisconsin’s banking system during an Assembly Committee on Financial Institutions hearing yesterday. Katsma serves as vice chair of the committee.
Department of Financial Institutions Deputy Secretary Cheryll Olson-Collins said other states have legalized marijuana because they’ve found it poses a problem if there’s no way to handle money that gets exchanged. If marijuana is not legal, banks and credit unions cannot bank those customers and businesses. Gov. Tony Evers in his budget proposed legalizing and taxing pot.
Surrounding states such as Illinois and Michigan have legalized marijuana, giving those financial institutions an unfair advantage near state lines, she noted in her testimony.
“Sometimes the financial institutions worry that they’re going to be outside the lines and they don’t want to be,” Olson-Collins said, adding that a marijuana banking statute, allowing banks to participate, would be “a bit of comfort.”
Wisconsin Credit Union League Vice President of Government Affairs Sarah Wainscott said the discussion has been happening at the federal level for a number of years.
“It creates a difficult environment when these businesses, and now that we’re seeing these businesses get closer and closer to Wisconsin state lines, don’t have a place to safely put their money,” she said.
Wainscott recalled a story of businesses in other states renting an armored truck to keep their money.
“You want to be able to make sure that these businesses have a safe place to do their banking, and so that’s what we would look for in some sort of cannabis or marijuana banking options.”
Committee Chair Rep. Cindi Duchow, R-Town of Delafield, indicated the committee would further the discussion “at some point.”