State Treasurers Group Endorses Marijuana Banking Legislation
By Tom Angell – May 20, 2019
A group representing state treasurers and finance officials is formally calling on Congress to pass legislation allowing marijuana businesses to more readily store their profits in banks.
The National Association of State Treasurers adopted a resolution on Friday announcing that the organization “supports common sense federal laws and regulations to provide essential banking services to state legalized cannabis businesses, promote public safety and financial transparency, and facilitate local, state and federal tax and fee collection.”
The measure, which makes clear that the group “takes no position as to whether cannabis should be legalized under the laws of the United States or of any state,” highlights the public safety issues caused by current federal policy, which makes many financial services providers reluctant to work with the marijuana industry.
“Lacking banking services, many legal cannabis businesses operate solely in cash,” it says. “Cash-based systems are inefficient, expensive, and opaque, making illicit activity more difficult to track and posing a significant risk to public safety by increasing the likelihood of violent crime.”
The status quo also causes headaches for regulators, the group argues.
“Whereas, unbanked cannabis businesses are unable to write checks, make and receive electronic payments, utilize payroll providers, accept debit or credit cards, or pay taxes through a financial institution, tax collection is more difficult and burdensome for both businesses and governments, and the potential for tax fraud is substantially increased,” the resolution states.
The group’s endorsement, which was led by Oregon State Treasurer Tobias Read and Utah Treasurer Damschen, follows a letter on the issue that 17 state treasurers signed earlier this month.
“This was an ongoing, thoughtful conversation the Association has been having for the last two years,” Read told Marijuana Moment. “The majority of states have legalized medical or recreational cannabis, and need to have safe banking options for these businesses. I hope that Congress will recognize that this public safety issue is bi-partisan and will create safer communities.”
The move by treasurers’ organization also comes after the National Association of Attorneys General, which represents the top law enforcement officials at the state level, issued a similar endorsement.
Legislation to protect banks from being punished by federal regulators for working with marijuana businesses is gaining momentum in Congress.
In March, the House Financial Services Committee approved a cannabis banking bill in a bipartisan vote of 45 to 15. The legislation, which is awaiting a vote on the House floor, now has 182 cosponsors. A companion Senate bill has 28 senators signed on.
In the meantime, the National Association of State Treasurers is urging the Trump administration to keep in place Obama-era guidance meant to provide some level of clarity and comfort to banks interested in working with the cannabis industry.
“NAST supports financial law enforcement authorities’ consistent interpretation of the FinCEN guidance and, barring changes to federal law, the continued application of the guidance to allow some financial institutions to offer banking services to the state legalized cannabis industry,” the resolution says.