WASHINGTON NCUA and the banking regulators last week were asked by lawmakers to set new rules allowing credit unions and banks to provide financial services to drug trades in states that have legalized marijuana use.
Reps. Ed Perlmutter, D-Colo., and Denny Heck, D-Wash., asked the regulators to “issue a memorandum providing guidance to regulated banks, credit unions and other financial services providers eliminating any further uncertainty and ensuring state and local governments have access to an effective and safe regulatory regime.”
The two lawmakers, who have introduced legislation aimed at setting national standards on financial services to the legal drug trade, said guidance from the regulators is essential for businesses that are deprived of formal financial services and forced to deal in cash.
That “places our communities are serious risk by increasing the likelihood of crime. ... Allowing licensed and regulated businesses to access the banking system will decrease the risks associated with operating a cash-only business and increase public safety.”
Colorado and Washington recently legalized recreational use of marijuana and are in the process of drafting enabling rules, regulations and tax mechanisms. Nineteen other states and the District of Columbia have approved medical marijuana programs.
The regulators letter, which also was sent to the FDIC, Department of the Treasury, Comptroller of the Currency and the Consumer Financial Protection Bureau, urges the financial agencies to assure credit unions and banks they can make their own business decisions related to legal financial transactions without fear of regulatory penalties or criminal prosecution.
The two House members have introduced a bill, the Marijuana Business Access to Banking Act, which would provide banks, credit unions and other depository institutions with the legal clearance to provide financial services to a legitimate marijuana-related business. 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 still is illegal.
Credit unions and banks are reluctant to provide financial services to marijuana businesses because federal law still forbids the practice, subjecting funds to forfeiture by federal law enforcement.
The bill would update federal banking laws to resolve conflicts between federal and state laws by disallowing federal regulators from punishing or penalizing a credit union or bank, or its employees, because it provides services marijuana-related businesses; exempting depository institutions from persecution and forfeiture simply for providing services to a marijuana-related business; and exempting marijuana-related business accounts from disclosure reporting requirements intended to identify individuals engaging in federally illegal activities.
