Downtown Denver was the scene of the Colorado Bankers Association's first ever national cannabis banking conference, which kicked...READ MORE
Rep. Ed Perlmutter’s bill on marijuana banking backed by attorneys general
A bill sponsored by U.S. Rep. Ed Perlmutter of Arvada to open up financial institutions for the marijuana industry picked up the endorsement of 19 state attorneys general on Tuesday.
The bill would address one of the the biggest headaches for the marijuana industry in Colorado: the lack of access to banks. It’s a public safety headache, too, since cash-only businesses are more susceptible to crime. What’s stopping most banks and credit unions is the potential criminal and civil liability they could face for “aiding and abetting” a federal crime and/or money laundering, which is how the federal government continues to view the marijuana industry.
Last April, Perlmutter introduced H.R. 2215, the Secure and Fair Enforcement Banking Act (SAFE Banking Act),. The measure would insure financial institutions “could service marijuana-related businesses without the fear of reprisal from the federal government,” according to a statement Tuesday.
Perlmutter’s bill picked up the endorsement of 19 state attorneys general, including Colorado Attorney General Cynthia Coffman. The bipartisan group sent a letter to Congressional leaders asking them to pass the bill or legislation like it.
“Despite the contradictions between federal and state law, the marijuana industry continues to grow rapidly,” the letter from the attorneys general states. “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.”
The letter also pointed out the need for the measure has become more pressing in light of a decision issued nearly two weeks ago by U.S. Attorney General Jeff Sessions. That decision rescinded a nine-year old Obama administration memo that ordered police and prosecutors to focus enforcement efforts on marijuana in areas such preventing its distribution to minors, and preventing criminal enterprises and cartels from engaging in illegal activity.
The recent rescission of the Obama administration guidance “has made the need for Congressional action to get the cash generated by this industry into a regulated banking sector even more urgent,” the attorneys general wrote.
Coffman said Tuesday that “opening a bank account is often one of the first steps a new business takes, but given the currently outdated federal banking laws, the multi-billion dollar legal marijuana industry is forced to remain in the financial shadows running cash-only businesses.” By bringing the industry into the banking system, Congress would “address public safety concerns and allow law enforcement, regulators and taxing authority to better monitor these businesses.” In an op-ed penned for the Washington Post last week, Coffman said “it is too late for the federal government to step in and dismantle this burgeoning industry.”
According to Perlmutter, 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.” Under the bill, federal banking regulators would not be able to threaten or limit a bank or credit union’s deposit insurance if they provide services to a marijuana business. Regulators also would not be able to require a depository institution to stop providing any kind of banking services to a marijuana business.
Perlmutter has been trying since 2013 to get the Safe Harbor law passed. “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,” he said. The 2017 version has 58 co-sponsors, including Democratic U.S. Reps. Diana DeGette of Denver and Jared Polis of Boulder and Republican U.S. Rep. Mike Coffman of Aurora.Content originally published by Colorado Politics on January 17, 2018.