WASHINGTON, DC — US Congressmen Ed Perlmutter (D-CO) and Denny Heck (D-WA) introduced a bill Wednesday, along with 16 bipartisan co-sponsors, to reform federal banking laws as they apply to marijuana related businesses, both in the existing medical marijuana industry and the forthcoming recreational marijuana industry in their respective states.
The bill, US House Bill 2652, the Marijuana Business Access to Banking Act of 2013, would allow regulated, state authorized marijuana businesses — either medical or recreational — to have access to financial institutions. The bill would update federal banking rules to resolve conflicts between federal and state laws, promoting community safety and financial security, according to the bill’s sponsors.
Currently, even the most basic banking services, such as business checking accounts or merchant credit card processing services, are largely unavailable to the marijuana industry.
Federal regulators impose stiff punishments and penalize banks and their employees for providing services to marijuana related businesses. The result is legitimate, licensed and regulated businesses have extreme difficulty accessing the banking system to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes.
This forces legal, state-compliant marijuana businesses to operate as cash-only enterprises, inviting crimes such as robbery and tax evasion, adding to the burden of establishing a legitimate small business in their community.
“We need to address the public safety, crime and lost tax revenue associated when these legal and regulated businesses are operating in a cash-only system,” said Rep. Perlmutter in a statement released Wednesday. “We also need to provide financial institutions assurance that they can make their own business decisions related to legal, financial transactions without fear of regulatory penalties or criminal prosecution.”
“As a small business owner, I can’t imagine trying to operate a legitimate business without access to the banking system,” added Rep. Heck. ”Forcing legitimate businesses to operate on a cash-only basis without bank accounts is an invitation for robbery, tax evasion and organized crime. With twenty-one states and D.C. now allowing for some form of legal adult marijuana usage, federal law needs to be updated to reflect the reality of the situation in the states.”
The bill would exempt financial institutions from federal persecution and forfeiture for providing financial services to a marijuana-related business, and exempt marijuana-related business accounts from disclosure reporting requirements intended to identify individuals engaging in federally illegal activities.
Under the bill, federal banking regulators may not:
- threaten or limit a depository institutions’ access to the Deposit Insurance Fund
- discourage, prohibit, or penalize depository institutions
- take any action against a loan made to a covered business
- force a depository institution to halt providing any kind of banking services
Additionally, any depository institution and/or the employees shall be immune from federal prosecution or investigation solely for providing banking services to a covered business.
Under the legislation, a covered “financial product and service” includes:
- providing and/or extending credit and servicing such loans
- extending or brokering leases of real property, providing real estate settlement services
- engaging in depository-taking activities, transmitting or exchanging funds on behalf of a consumer
- selling, providing, or issuing stored value or payment instruments
- providing check cashing, check collection or check guaranty services
- providing payments or other financial data processing products or services
- providing financial advisory services
- collecting debt related to any consumer financial product or service
The legislation covers the following “marijuana-related legitimate business” which holds and maintains a license from a state or local government to engage in such activity:
- manufacturer, grower and producer
- any business who handles, sells, transports, displays or distributes marijuana or marijuana products.
Colorado and Washington recently legalized recreational adult-use of marijuana and are in the process of crafting rules, regulations and tax mechanisms for the product. Additionally, 19 other states and the District of Columbia have approved medical marijuana programs.
Bi-partisan Co-Sponsors of the bill include: Denny Heck (WA), Jim McDermott (WA), Earl Blumenauer (OR), Jared Polis (CO), Adam Smith (WA), Sam Farr (CA), Derek Kilmer (WA), James Moran (VA), Eleanor Holmes Norton (DC), Michael Capuano (MA), Suzan DelBene (WA), Mike Coffman (CO), Diana DeGette (CO), Peter DeFazio (OR), Alan Lowenthal (CA), Chellie Pingree (ME), and Dana Rohrabacher (CA).
WA, CO Congressmen Introduce Federal Bill to Allow Banking for Marijuana Industry was written by Thomas H. Clarke and appears in full on The Daily Chronic.
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