Posted on 02/14/2014 3:13:13 PM PST by mgist
US regulators gave banks the green light to accept money from legal marijuana businesses but cautioned that they expected financial institutions to conduct “thorough due diligence” and report possible criminal activity.
The guidance from the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Department of Justice is meant to tackle one of the biggest challenges for a growing industry that is legal in a score of states but prohibited by federal law.
Banks have shied away from doing business with marijuana groups for fear of prosecution. Unable to make deposits or accept credit cards, many “cannabusinesses” operate entirely in cash, raising safety concerns.
The guidelines released on Friday state that banks can provide services to state-regulated marijuana businesses without violating federal money-laundering or terrorism-financing laws, a senior FinCEN official said.
Wells Fargo, the largest US bank by market capitalization, said on Friday it was reviewing the guidance, adding that “it is currently Wells Fargo’s policy not to bank marijuana businesses, based on federal laws.”
The guidance stops short of creating a “safe harbour” from prosecution, the FinCEN official said. But it extends the justice department’s stance, announced last year, that it would not prosecute marijuana businesses that comply with state law where the drug is legal.
“This is a very complicated and tough issue where we have state and federal laws that contradict one another. We hope through this guidance that we’re going to give more transparency to the marijuana business in this country and allow law enforcement to do their job,” the FinCEN official said.
The move may not be enough to reassure financial institutions, however. Banking groups say Congress needs to pass laws to get the industry on board.
“Guidance or regulation doesn’t alter the underlying challenge for banks,” said Frank Keating, president of the American Bankers Association. “As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.” Don Childears, president of the Colorado Bankers Association, said: “At best, this amounts to ‘serve these customers at your own risk’ and it emphasises all of the risks . . . An act of Congress is the only way to solve this problem.”
At best, this amounts to ‘serve these customers at your own risk’ and it emphasises all of the risks - Don Childears, president of the Colorado Bankers Association Twenty states and the District of Columbia have legalised medical marijuana, while Colorado and Washington have gone further by allowing it to be grown and sold for recreational use. ArcView Group, a cannabis investor network, projects the legal market will reach $2.6bn this year. Growers, retailers and the governors of Colorado and Washington have been pushing the federal government to pave the way for bank access, highlighting the risks facing cash-based businesses. In Colorado, where recreational sales began in January, dispensaries employ armed guards, growers bring suitcases of currency to pay state licensing fees and some businesses use pre-paid debit cards to pay their bills. Business owners were cautiously welcoming of the government’s move.
“It’s not perfect but it gets us one step closer,” said Todd Mitchem of OpenVape, a Denver-based company that makes cannabis vaporisers. “It’s bringing further legitimacy to an industry that’s at risk.” OpenVape had six bank accounts closed last year and another one shut down on Thursday, Mr Mitchem said. He hoped Friday’s announcement would prompt banks to take another look – and encourage Congress to change the law. “I’m not asking for federal legalisation today. What I want is [the government] to say to the banks, ‘do what you need to support legitimate business’.”
Won’t be long before its all kinds of drug $$ and drugs will be legalized. Cheap marijuana and heroin to keep the unemployed sheeple tranquilized. And lots of drug profits to help keep the bank bonuses flowing.
Banks were losing out on too large a pile of cash.
All the major banks have been laundering drug money anyway. They all have offshore banks that aren’t regulated.
it is all pretty ridiculous.
Pot laws in this country ,based on Reefer Madness, are moronic. Will it “cause” murders and broken families? Well yes by definition. These would mostly happen anyway. Is it a gateway drug? Only in the sense the reefer dealers sell the other stuff too. The war on drugs is a lot of the reason our country now sucks. This is exactly where Republicans have blended with rest of the ruling class.
Why does a business that “operates entirely in cash, raise safety concerns”?
Why does a business that “operates entirely in cash, raise safety concerns”?
America, once the greatest achievement of good in human history...
...to now. A pathetic, degenerate “dopehead nation.”
Why do you hate freedom?
We’ve been a boozehound nation for so long, the change will be nice.
If nothing else it may put to rest the argument that it is a gateway drug.
Because there's lots of cash and bad people like to steal it?
(See also Brink's trucks, liquor stores and 7-11s.)
Defining deviancy down.
A nation of choom-gang druggie scum? To hell with it. A fag-marriage nation? I won’t be lifting a finger for such a country. That’s Obama’s America. It can burn to the ground for all I care.
I’ve got zero problems with this.
If pot is legal, then profits from pot should be as well.
The key is whether pot is legal. Where it is, this is not an issue.
Any of it named SOMA yet?
From what I'm reading the Washington State prices when the stores open later this year will be anything but cheap.
Banks are cops now.
I'm glad I only have 20 or so years left. This isn't the America in which I grew up.
But you were OK with passed out drunks blocking the sidewalk?
Who says I’m OK with scumbag drunks passed out on the sidewalk? I’m all for seeing them tossed in the hoosegow for a couple of months.
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