HB 4091 Creates State Banking Entity


This bill establishes Oregon Cash Depository Corporation as independent public corporation with the intent to create a governmental entity to provide banking services to the cannabis industry, but does not limit it to cannabis.

Fiscal Responsibility
The lack of banking services for the cannabis industry is a matter of federal regulations. The Oregon banking community would like to provide banking services to the cannabis industry if there was a legal and regulatory path that allowed them to do so. Should the state set up an illegal corporation to fill that hole?

Limited Government
Creates a new governmental entity that would, among other things, be permitted to serve as a depository for cash, deliver cash management services, and provide transportation facilities and services for entities that are primarily cash-only businesses. Several of the powers delegated to the OCDC are banking functions, including the ability to lend (Section 2(3)(a) & (L)) and take deposits (Section 2(3)(i)). Cannabis businesses currently use a LLC to secure bank accounts by setting up limited liability corporations that are management companies providing a list of services, from payroll to accounting to bookkeeping to property management. The money from the marijuana business flows to the company — usually with a nondescript name that doesn’t disclose its ties to marijuana — and is deposited in the company’s bank account. A federal fix is for Congress to remove marijuana from the list of Schedule I narcotics, putting the drug on par with an FDA-regulated medicine rather than heroin.

Free Markets
For the last 18 months, the Oregon Bankers Association has led a Cannabis Banking Coalition that has brought together the bankers associations from approximately 20 states to discuss the challenges and possible solutions, and a state-run banking entity poses more problems than solutions.


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