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Attorneys General Urge Congress to Protect Public Safety, Pass SAFE Banking Act
Letter: recent rescission of Cole Memo has made the need for Congressional action “even more urgent”
Washington, D.C. – Today, a bipartisan group of state attorneys general sent a letter to Congressional leaders urging them to protect public safety and pass the SAFE Banking Act. Nineteen state attorneys general signed the letter – including Colorado Attorney General Cynthia Coffman – asking for Congressional action in light of the recent rescission of the “Cole Memo” guidance.
The letter states, “Despite the contradictions between federal and state law, the marijuana industry continues to grow rapidly…Yet those revenues often exist outside the regulated banking space. Businesses are forced to operate on a cash basis. The grey market makes it more difficult to track revenues for taxation purposes, contributes to a public safety threat as cash intensive businesses are often targets for criminal activity, and prevents proper tracking of large swaths of finances across the nation.”
“To address these challenges, we are requesting legislation that would provide a safe harbor for depository institutions that provide a financial product or service to a covered business in a state that has implemented laws and regulations that ensure accountability in the marijuana industry such as the SAFE Banking Act or similar legislation,” the letter continues.
H.R. 2215, the Secure and Fair Enforcement Banking Act (SAFE Banking Act), most recently introduced by U.S. Rep. Ed Perlmutter (CO-07) in April 2017, ensures financial institutions can service marijuana-related businesses without the fear of reprisal from the federal government. Today, financial institutions who provide banking services to legitimate marijuana businesses are subject to criminal and civil liability for "aiding and abetting" a federal crime and money laundering under the Controlled Substances Act and federal banking statutes. The SAFE Banking Act removes uncertainty by providing "safe harbor" protections for depository institutions who provide a "financial product or service" to a covered business. For example, federal banking regulators would not be able to threaten or limit a bank or credit union’s Deposit Insurance, take any action or downgrade a loan made to a covered business, or force a depository institution to halt providing any kind of banking services to a marijuana-related legitimate business.
“I first introduced this legislation in 2013 to get cash off the streets and reduce the threat of crime, robbery and assault in our communities,” said Perlmutter. “Voters have spoken on this issue and voted to legalize some form of marijuana in nearly every state in the country. States are taking responsible steps to regulate the industry and we must ensure that includes access to the banking system.”
Currently, hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes. This legislation will also ensure all small businesses and their employees are treated fairly. As of today, H.R. 2215 has 64 cosponsors.