The American Bankers Association, recognizing that Guam, Puerto Rico, the District of Columbia and 33 states have legalized the use of marijuana to some degree, has issued a statement urging the U.S. Congress to resolve the clash between federal law against marijuana and local or state laws allowing it.
Despite legalization at the state or territory level, the national bankers group stated, “the possession, distribution or sale of marijuana remains illegal under federal law, which means any contact with money that can be traced back to state marijuana operations could be considered money laundering and expose a bank to significant legal, operational and regulatory risk.”
The group issued a fourth-quarter 2018 report titled “Compliance and the Cannabis Conundrum.”
“When a bank processes transactions for a customer where the proceeds come from marijuana, the bank technically is laundering money,” the report states.
“In addition to growers and retailers, there are vendors and suppliers, landlords and employees that are indirectly tied to the cannabis industry, thus posing legal risk for banks serving such entities and individuals, as indirect connections to marijuana revenues are hard, if not impossible, for banks to identify and avoid,” the bankers association stated. “The rift between federal and state law has left banks trapped between their mission to serve the financial needs of their local communities and the threat of federal enforcement action.”
With recreational marijuana now being public law on Guam, Del. Michael San Nicolas said Thursday, “we will work in our position on the Financial Services Committee to ensure that the Congress enables these enterprises to enter the financial system to eliminate the risks of all-cash enterprises.”
He spoke recently before the committee on the issue.
Guam Attorney General Leevin Camacho has said, with banks unable to process marijuana-related transactions, cash-based marijuana businesses could be targets of thefts, robberies and other crimes.
‘The time has come’
The bankers group takes no position on the moral issues raised by legalizing marijuana, but it added the growing number of states that allow its sale and use raises practical issues that must be addressed.
“ABA believes the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use.”
The U.S. House of Representatives’ Financial Services Committee recently voted 45-15 to advance the Secure And Fair Enforcement Banking Act, to the full body.
Sens. Jeff Merkley, a Democrat from Oregon; and Cory Gardner, a Republican from Colorado; are expected to file companion legislation on access to financial services for marijuana businesses in the U.S. Senate soon, but a similar bill during the last Congress garnered 20 cosponsors in the chamber but did not receive a hearing or vote, Forbes reported on March 28.
April 5, 2023 Published by The Guam Daily Post.