In August we reported on the challenges that financial institutions face in Missouri now that medical cannabis use is permitted, and we suggested that the SAFE Banking Act of 2019, H.R. 1595, would provide a much-needed safe harbor for banks handling cannabis money.
Although there was doubt even a month ago that the SAFE Banking Act would pass, the bill was approved by 321-103, far more than the required 2/3 majority to pass through the House.
The SAFE Banking Act is unique in that it draws both praise and objection from each side of the legislative aisle. While some Republicans support the bill due to its benefit to commerce and the financial services industry, other more socially conservative legislators refuse to support the bill because marijuana remains illegal under federal law, and some believe marijuana to be dangerous.
Conversely, while the bill has garnered some Democratic support due to its progress toward future decriminalization of marijuana and scaling back the war on drugs, others simply do not want to give more power or leniency to financial institutions.
This dichotomy of perspectives even within each party makes it difficult to predict how the SAFE Banking Act will fare in the Senate. But, there is no doubt that Missouri financial institutions would benefit from its passage, and proponents of the bill continue to push hard for it to be put into law.
As a reminder, the SAFE Banking Act would not change the status of cannabis as a Schedule I controlled substance under federal law. But it would permit financial entities to provide checking and savings accounts, credit cards, loans, and other financial products to marijuana-related businesses, and it would also prohibit the feds from seizing assets or taking punitive action against those banking institutions.
We will continue to monitor the status of this legislation.
Now That Missouri is Accepting Marijuana-related Business Licensure Applications, What is the Plan for the Other Green Stuff?August 2, 2019 | Megan Stumph-Turner
From now until August 17, 2019, Missouri entities may apply for a license to cultivate, dispense, manufacture, test, and transport marijuana, pursuant to last year’s passage of Amendment 2, permitting marijuana use for serious medical conditions. A cloudy haze remains, however, over how financial institutions doing business with marijuana-related businesses (“MRBs”) will be governed.
As most are aware, while cannabis is now legal in some form or fashion in more than 30 states as well as D.C., cannabis manufacture and use is still prohibited by federal law. Consequently, handling of proceeds from MRBs is considered money laundering, and financial institutions are required to submit Suspicious Activity Reports (“SARs”) with FinCEN when certain red flags are raised in relation to suspected cannabis business.
The SAFE Banking Act of 2019, H.R. 1595, would provide a safe harbor for financial institutions handling MRB money while the legality of cannabis continues to be debated at the federal level. More specifically, the SAFE Banking Act would prevent federal regulators from interfering with relationships between financial institutions and MRBs in states where cannabis is legal, and it would allow MRBs to access traditional banking services without threat of seizure or prosecution. The bill, if passed, would not change the status of cannabis as a Schedule 1 controlled substance.
In recent weeks, several Missouri credit unions and banks have joined together to urge passage of the SAFE Banking Act, in anticipation of this month’s open application process. Unfortunately, there is not much confidence that it will be passed.So, how much money are we talking about? Last year, cannabis reportedly generated over $8 billion. The revenues are expected to triple over the next 5 years. Even though Missouri’s share will be a fraction of anticipated revenues, that’s still going to be a whole lot of green. Now, Missouri financial institutions and prospective MRBs will remain in the sticky situation of figuring out what to do with all of it.
Compliance Check for Financial Institutions: Is Your Website ‘Accessible' to those with Disabilities?June 10, 2019 | Megan Stumph-Turner
What do Amazon, Domino’s, and Beyoncé have in common? Their websites have all have been the subject of high profile lawsuits alleging failure to comply with the Americans with Disabilities Act of 1990 (the “ADA”). Your financial institution could be, too, if it has not taken measures to ensure its website is ADA compliant.
We most often associate the ADA with physical limitations of brick and mortar buildings. But in recent years, several courts have extended the protections of the ADA to customers using websites in times where we conduct most of our business online. The relevant portion of the ADA provides that “No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to) or operates a place of public accommodation.” 42 U.S.C. §12182(a). Even though the ADA has not been amended to specifically address websites, several courts have held that the ADA applies to website accessibility, whether by nexus to a physical location or by the website’s public nature.
There is currently a split among the circuits as to whether or not a website falls under the scope of the ADA, but recent cases show a tilt in favor of holding that websites are either places of public accommodation in their own right, or have a sufficient nexus to services provided out of a brick and mortar location to fall under the ADA. In one of the more recent cases, the Ninth Circuit Court of Appeals held that an ADA lawsuit could proceed against Domino’s for alleged failure to comply with appropriate accessibility standards for its website. The Court reasoned, “The statute applies to the services of a place of public accommodation, not services in a place of public accommodation. To limit the ADA to discrimination in the provision of services occurring on the premises of a public accommodation would contradict the plain language of the statute.” Domino’s had not established that compliance would be an undue burden or would materially alter its business, such that the ADA claim was permissible.
While ADA website litigation is not altogether new, it has gained traction in the past couple of years. Financial Services Litigators are closely monitoring these cases across the country and expect these filings against banks and credit unions to increase, due to increasing popularity of, and reliance upon, online banking by customers. Financial institutions are encouraged to ensure their websites comply with the current industry standard for accessibility, as well as state-level requirements. In evaluating its website, a financial institution should ask these questions:
- Is the website “perceivable”? Does it:
- Provide text alternatives for non-text content
- Provide captions and other alternatives for multimedia
- Create content that can be presented in different ways
- including by assistive technologies, without losing meaning
- Make it easier for users to see and hear content
- Is the website “operable”? Does it:
- Make all functionality available from a keyboard
- Give users enough time to read and use content
- Avoid content that causes seizures
- Help users navigate and find content
- Is the website “Understandable”? Does it:
- Make text readable and understandable
- Make content appear and operate in predictable ways
- Help users avoid and correct mistakes
- Is the website “Robust”? Does it:
- Maximize compatibility with current and future user tools.
The Eighth and Tenth Circuits have not yet issued rulings applicable to this topic. We will continue to monitor for new cases and provide updates.
About Financial Services Law Blog
The BSCR Financial Services Law Blog explores current events, litigation trends, regulations, and hot topics in the financial services industry. This blog will inform readers of issues affecting a wide range of financial services, including mortgage lending, auto finance, and credit card/retail transactions. Learn more about the editor, Megan Stumph, and our Financial Services practice.
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