WASHINGTON — Senate lawmakers are putting pressure on the Treasury Department's financial crimes unit to clarify to banks that businesses hired by marijuana growers and dispensers should not be treated like pot firms themselves.
The Financial Crimes Enforcement Network issued guidance in 2014 that warned banks and credit unions about providing services to state-sanctioned marijuana businesses. Fincen said while the businesses may be legal at the state level, it is not federally legal and those businesses are a money laundering risk. The guidance ultimately said it is up to banks to determine whether they want to provide financial services to the industry.
In a letter sent Thursday to Fincen Acting Director Jamal El-Hindi, ten senators said banks have been denying financial services to lawyers, chemists and even plumbers that are hired by the marijuana businesses because they are afraid of a possible Fincen enforcement action.
"Most banks and credit unions have either closed accounts or simply refused to offer services to indirect and ancillary businesses that service the marijuana industry" said the letter, which was sent by Sens. Jeff Merkley, D-Ore.; Ron Wyden, D-Ore.; Kirsten Gillibrand, D-N.Y.; Patty Murray, D-Wash.; Elizabeth Warren, D-Mass.; Bernie Sanders, I-Vt.; Al Franken, D-Minn.; Angus King, I-Maine; Lisa Murkowski, R-Ark.; and Cory Booker, D-N.J.
"We urge you to issue further guidance to financial institutions on their ability to provide services, specifically to indirect businesses that do nothing more than provide services to the state-sanctioned marijuana industry," the letter added.
Wyden has introduced a bill with Merkley that would allow marijuana businesses to use banks.
In the letter, the senators said because the business are forced to operate strictly in cash, they also become a target for criminals and makes it difficult for the government to collect taxes.
"The fledgling legal market for marijuana is around $7 billion, a figure that's dwarfed by the overall $50 billion U.S. market, most of which remains illegal. This business environment is an invitation to tax fraud, robberies, money laundering, and organized crime," said the letter.
Marijuana is becoming more widely accepted and the pressure to update federal guidance to keep up with state laws is increasing. In November, eight states voted to allow or expand the legal use of marijuana, bringing the grand total of states and jurisdictions allowing some form of legal use to 29.
A spokesperson for Fincen said it was reviewing the letter.