March 2, 2021

Volume XI, Number 61

Advertisement

March 02, 2021

Subscribe to Latest Legal News and Analysis

March 01, 2021

Subscribe to Latest Legal News and Analysis

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.

Advertisement
© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume IX, Number 8
Advertisement
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

949-851-5428
Advertisement
Advertisement