Time to open banking up to pot industry

Column by Colorado Rep. Ed Perlmutter
Posted 3/13/19

Today, 47 states plus the District of Columbia – representing 97.7 percent of the population – have legalized some form of adult recreational, medical or limited-medical use of marijuana. The …

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Time to open banking up to pot industry

Posted

Today, 47 states plus the District of Columbia – representing 97.7 percent of the population – have legalized some form of adult recreational, medical or limited-medical use of marijuana. The majority of American voters have spoken and it’s happening whether we act or not.

That’s why, following the first-ever congressional hearing on the issue of cannabis banking, I have again introduced bipartisan legislation to allow marijuana-related businesses in states with existing regulatory structures to access the banking system. H.R. 1595, the Secure and Fair Enforcement Banking Act of 2019, or SAFE Banking Act, is focused solely on taking cash off the streets and making our communities safer.

Because cannabis is considered illegal under the federal Controlled Substances Act, financial institutions providing banking services to legitimate and licensed marijuana businesses are subject to criminal prosecution. Since state and federal law are not aligned on the issue, legal and legitimate businesses are forced to operate on a cash-only basis creating a serious public safety risk for employees, businesses and communities, as well as providing an opportunity for tax evasion, money laundering and other white-collar crimes. Today, just in Colorado, thousands of licensed and regulated businesses do not have access to the banking system and are unable to accept credit or debit cards, deposit revenues, or write checks to meet payroll or pay taxes.

Only Congress can provide the certainty financial institutions need to start banking legitimate marijuana businesses – just like any other legal business – and reduce risks for employees, businesses and communities across the country. Already, the SAFE Banking Act has the support of 108 House members.

While other legislation has been introduced to address different problems faced by businesses in these states, the SAFE Banking Act is the only legislation that prohibits federal banking regulators from taking adverse actions against financial institutions which protects banks and credit unions so these legitimate businesses can access the banking system.

I have introduced similar legislation every Congress since 2013, however it has not received one hearing until this year. During the February 13 hearing, support for the SAFE Banking Act was vocalized by several witnesses, including in testimony from California State Treasurer Fiona Ma and the American Bankers Association. The Independent Community Bankers of America, the Credit Union National Association and 19 Attorneys General endorsed the SAFE Banking Act last Congress.

The genie is out of the bottle. It’s now up to Congress to address this banking crisis and align federal and state laws. The SAFE Banking Act supports states’ rights and protects public safety, and I look forward to continuing to push this important legislation forward over the coming weeks and months.

Colorado Rep. Ed Perlmutter (Arvada) represents Congressional District 7.

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