Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

California Legislature Mulls Cannabis Bank Charters

One of the first bills introduced in the current California legislative biennium proposes to enact a Cannabis Limited Charter Banking and Credit Union Law.  Authored by Senator Robert M. Hertzberg, SB 51 is an attempt to address the fact that cannabis businesses are unable to open and use checking accounts, make or receive electronic payments, or accept credit or debit cards because cannabis remains illegal under federal law.

The law, if enacted, would provide for the licensing and regulation of cannabis limited charter banks and credit unions under the oversight of the Commissioner of Business Oversight.  These institutions would be authorized to issue special purpose checks that would be valid for only for specified purposes such as paying fees, taxes and rent.  They would be prohibited from engaging in banking activity with any other financial institution that lacks a limited purpose charter.  

The bill has not yet been assigned to any committee but has attracted several co-authors in the Assembly and Senate.  It currently is a non-urgency measure.  If it remains so and is enacted, it would not take effect until January 1, 2020.  Thus, it may be some time before we see the "First Bank of Doobie" in the Golden State.

Share on:

Financial Institutions

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

RECOGNITION

NationalLawReview

JDSupra 2018

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

YOUTUBE

FACEBOOK