Bipartisan Group of State Attorney Generals Demand Bank Protection Law

The guidelines are unclear, which may prompt financial institutions to start closing accounts with marijuana businesses.
Author:
Updated:
Original:
Image placeholder title

Attorney Generals Request Congress Protect Banks in Legal States

WASHINGTON – A bipartisan group of state attorney generals have collectively requested that Congress protect banks in legal marijuana states by passing legislation that allows them to provide accounts for cannabis businesses, Reuters reported.

The marijuana market is a $7 billion-dollar industry in need of financial establishments to secure funds. Attorney General Jeff Sessions did not notify any federal agencies overseeing the banking sector when he revoked the federal protection for legal marijuana states on Jan.4. The surprise announcement has panicked and confused many within the banking industry, promoting the group of state attorneys to write the letter to Congress urging them to protect state rights by law.

With the Cole Memo, which provided marijuana states protection from federal interference or prosecution, banks felt secure following guidelines originated by the U.S. Treasury’s Financial Crimes Enforcement Network in 2014. The guidelines outline how banks should handle marijuana business dealings. Now that the protection has been rescinded by Sessions, the guidelines are unclear, and the uncertainty may prompt financial institutions to start to closing accounts with marijuana business customers. Banks are currently prohibited from securing funds for marijuana businesses under federal law, but because marijuana is legal under state law, with the protection, banks opened accounts with business operating according to state regulations.

Marijuana is already legal in Washington DC and 29 states. State attorneys from the District of Columbia, Guam and 17 states authored the letter advising Congress to provide legislation protecting banks and proposing legislation that would generate billions of dollars for the banking industry. The letter argues that legalizing and regulating an already established market would bring the state millions of dollars in tax revenue. It would also decriminalize marijuana and save millions in law enforcement resources by eliminating minor marijuana offenses. A Justice Department spokesman declined to comment.

Niko Mann is a freelance writer living in Los Angeles, California.

Related