SACRAMENTO, Calif. A federal court on Friday ordered the forfeiture to the Drug Enforcement Administration of $67,000 in a Golden 1 CU account held by the owner of a legal marijuana dispensary, but allowed the member to keep $34,000 of the $101,600 seized a year ago.
The split ruling by the U.S. District Court for the Eastern District of California adds fire to the debate over drug forfeiture laws for credit unions and banks in states where marijuana dispensaries are legal, like California, and now Washington and Colorado. House members from Washington and Colorado recently introduced legislation that would clear the fog from the sometime-contradictory drug laws by providing drug operations sanctioned by the states with clear and legal financial services.
In the latest legal dispute, agents with the Internal Revenue Service seized $101,600 from the Golden 1 CU account of the owner of El Camino Wellness Center, a Sacramento company doing business under the state’s marijuana dispensary law. During the search of the dispensary, agents also confiscated 174 marijuana plants, ten pounds of processed marijuana, and $44,374 in cash. An additional $21,813 in cash was discovered during a search of the owner’s home.
Under a consent order certified by the court, the federal government will be entitled to $67,000 from the Golden 1 account and the credit union member will get $34,600 returned to him.
Introduction of the bill in Congress comes as dozens of credit unions are debating whether to accept deposits from marijuana growers or dispensaries that sell pot for medicinal purposes where state law permits it. Like The Golden 1, numerous credit unions have had deposits seized by law enforcement in recent months because they were believed tied to the drug trade, even the lawful one.
The Marijuana Business Access to Banking Act would give banks and credit unions the legal clearance to provide financial services to a marijuana-related legitimate business, ensuring these businesses do not have to operate on a cash-only basis, according to Rep. Ed Perlmutter, D-Colo., a member of the House Financial Services Committee, who sponsored the measure.
Under current federal laws, credit unions and banks are barred from providing services to marijuana-related businesses because marijuana is considered a controlled substance and is still illegal under federal law.
The bill addresses the multiple concerns cited by credit unions and banks when denying or revoking the accounts of marijuana businesses and marijuana business owners. Specifically, the bill disallows federal regulators from punishing or penalizing a credit union or bank or its employees because it provides services marijuana-related businesses; exempts depository institutions from persecution and forfeiture simply for providing services to a marijuana-related business; and exempts marijuana-related business accounts from disclosure reporting requirements intended to identify individuals engaging in federally illegal activities.
