Supervisors of state chartered credit unions have written to Congress in support of legislation that would clarify the legality of providing financial services to legal marijuana businesses.
“This legislation represents an important first step in curing the ambiguity around serving these businesses and their affiliates,” NASCUS President/CEO Lucy Ito wrote in a July 15 letter to Sen. Jeff Merkley (D-Ore.) and Sen. Cory Gardner (R-Colo.), the primary sponsors of the Marijuana Business Access to Banking Act of 2015 (S. 1726). Ito also addressed the letter to Rep. Earl Perlmutter (D-Colo.) and Rep. Denny Heck (D-Wash.) who have sponsored similar legislation (H.R. 2076).
Ito pointed out that while 17 states and the District of Columbia have legalized marijuana use in some form, it remains illegal under federal law, creating tension that leaves state chartered credit unions torn between their obligations to follow federal law and serve their communities.
“Resolving this conflict of law will make the communities where this activity has been legalized and the financial institutions serving those communities safer,” Ito wrote. “It will allow businesses operating in accordance with state law to serve customers, pay taxes and minimize the risk of attracting violent crime. It will bring non-law abiding businesses under the direct and thorough scrutiny of state and federal supervisory authorities. Finally, it will enable financial institutions to pursue business and development plans with a clear understanding of regulatory expectations.”
Ito cited data from the U.S. Treasury's Financial Crimes Enforcement Network that more than 100 financial institutions have begun serving legal marijuana firms.
“Current guidance from the Department of Justice and FinCEN, while helpful, leaves financial institutions exposed to the risk of significant criminal, civil and administrative action,” Ito pointed out. “If left unresolved, the uncertain status of marijuana businesses under Federal law could translate to real losses for community financial institutions, not to mention the ongoing threat of violent robberies in local communities where legal marijuana businesses are forced to operate with dangerously large amounts of cash.”
Ito argued that if financial institutions have robust Bank Secrecy Act and anti-monetary laundering programs, along with strong internal controls, marijuana businesses should be able to access banking services and that, if they did, the regulators could also better regulate those accounts and institutions.
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