Bipartisan Senate Bill Would Protect Banks That Do Business With Marijuana Merchants

Regulators and prosecutors would be barred from punishing financial institutions for serving state-licensed cannabusinesses.


Office of Ron Wyden

Yesterday five senators—three Democrats and two Republicans—introduced a bill aimed at eliminating federal obstacles to banking services for state-licensed marijuana businesses. The Marijuana Businesses Access to Banking Act bars federal regulators and prosecutors from punishing financial institutions for serving cannabis growers or distributors who comply with state law. It would protect such banks from regulatory pressure, civil penalties, loss of federal deposit insurance, forfeiture, and prosecution for crimes such as money laundering or aiding and abetting violations of the Controlled Substances Act. The threat of such consequences has kept most banks from dealing with cannabusinesses, forcing their owners to deal exclusively in cash, which creates daunting logistical burdens and security problems.

"By compelling Oregon business owners to operate on a cash-only basis, current federal laws are making marijuana businesses sitting ducks for violent crimes and perpetuating negative stereotypes," said Sen. Ron Wyden (D-Ore.), one of the bill's sponsors. "It is ridiculous to make any business owner carry duffle bags of cash just to pay their taxes. Our bill will finally force the federal government to respect the decision Oregonians made at the polls and allow law-abiding marijuana businesses to go to the bank just like any other business." The other sponsors of the bill are Jeff Merkley (D-Ore.), Cory Gardner (R-Colo.), Michael Bennet (D-Colo.), and Rand Paul (R-Ky.).

A House version of this bill was introduced in April by Rep. Ed Perlmutter (D-Colo.). It has 26 cosponsors, only one of whom, Colorado congressman Mike Coffman, is a Republican. The CARERS Act, a broader bill that aims to repeal the federal ban on marijuana with respect to people who produce, distribute, or use marijuana for medical purpose in compliance with state law, includes similar provisions regarding banking.

The Justice Department and the Treasury Department have attempted to address the marijuana banking problem by issuing guidelines for financial institutions that decide to do business with marijuana merchants. Although intended to reassure banks leery of marijuana money, the memos also highlighted the grave civil and criminal risks involved, which could prove ruinous if this administration or the next decides to change course.

"In addition to the obvious public safety concerns cited by federal, state and local law enforcement officials, forcing these businesses to deal exclusively in cash makes it difficult for states to collect taxes, monitor transactions and enforce regulations supported by voters," said Dan Riffle, director of federal policy at the Marijuana Policy Project. "Allowing these businesses to access basic banking services is a critical step toward letting states regulate marijuana as they see fit without federal interference, a position virtually every serious contender for the 2016 presidential nomination has taken."

NEXT: Bill Would Allow Marijuana-Business Banking, Libertarian Brothel Owner Eyeing Nevada Senate, First Chapter of Harper Lee's New Novel Out: A.M. Links

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  1. This is why I didn’t invest with all those Canna security firms that popped up in Washington.

  2. This makes so much sense I’m surprised any politicians would suggest it.
    A business cannot be operate legitimately if it is denied access to banking and financial services.

    1. A business cannot be operate legitimately if it is denied access to banking and financial services.

      That’s the point.

      1. But once you get enough people in that line of business, taxation is a much more efficient way to rob them.

        1. Robbing them is not the point. Preventing them from doing business is the point.

          1. But that doesn’t seem to be doing the job in states that have legalized. So time for taxes.

            1. That would be admitting defeat. Not an option.

              1. We’ll find out, I guess. I’m going to stick with my guess that the Feds will eventually figure out that it’s better to get their cut from the businesses than to fuck them over one at a time.

  3. Wow. Soft on crime much, Senate? #DrugsRBadMkay?

  4. They could solve the problem a lot more permanently and directly by just lifting the ban on MJ federally.

    1. thats to simple

    2. Still wouldn’t solve the problem – Operation Chokepoint specifically goes after *legal* businesses by quietly menacing their banking and CC processors.

    3. What? Admit that they were wrong when they prohibited it? Not an option.

  5. How about then moving on to protecting financial service access for other legal businesses such as guns, payday loans, porn, et al? See also: Operation Chokepoint

    1. Seems to me there was already a law passed to protect those businesses and prevent that kind of government activity. I think it was written on parchment in the late 1780s, maybe?

  6. Or, the administration could solve the root problem by simply unscheduling marijuana.

    1. The root problem is federal control of banks, even state-chartered banks.

      That’s where to start your scorched-earth march through the Federal Register.

      1. Nah. If we’re going scorched earth, I’ll just start on page one.

  7. will they create a similar bill to protect banks that do business with gun stores?

  8. OT: Dear Reason eds.: lately, I’ve noticed a dirth of articles about Mr. Wonderful. Is this part of a conscious reappraisal or the result of a directive from the boss that we should, you know, hedge our bets?

      1. “The other sponsors of the bill are…Rand Paul (R-Ky.).”

        Aww, man. I should have read more than the title of the article. Hey, it’s good that you guys still think this right-wing ideologue is freedom fries.

        1. Shut the fuck up jackass. Nobody around here gives two shits what your pathetic mortgage-dodging ass has to say.

  9. About time. Everyone knows weed clinics carry a lot of cash (and weed), which makes them the ideal target for criminals to rob. Then the cops point and say, “Look at the crime that place has brought to our community!” Not sure if the people who created this situation are brilliant, or just idiots.

    1. For some people, the potential for armed robbery is a feature.

  10. Maybe I am just old fashioned but I am pretty sure the PRESIDENT OF THE UNITED STATES as the chief executive could stop this from happening right now by ordering the regulators and federal prosecutors to stop doing it.

    It is nice that we have a bill doing this. It is better than nothing. The bigger issue, however, is why is such a bill needed? Has this issue just not made the papers so that Obama doesn’t know about it? Could we just get the New York Time to do a story on it so Obama could come out of retirement for the afternoon and issue an executive order putting an end to it?

    1. Now now John, the President (I don’t remember many people capitalizing that word before this particular one) is not a dictator, as he explained a few years ago. Unless the legislature doesn’t play along, in which case he can easily transition into one re: immigrants.

      1. He totally has the “prosecutorial discretion” to completely stop enforcing the Immigration and Naturalization Act. It is just above his pay grade to stop federal regulators and prosecutors from going after banks, who have not violated the law, for having the wrong customers.

      2. Its always been capitalized – its a title.

        1. Yeah, it is the predominant style. It’s only weirdo libertarians who don’t capitalize it or call former presidents by the title.

          1. It’s only weirdo libertarians who don’t capitalize it or call former presidents by the title.

            I guess I’m a weirdo libertarian, because I hate the quasi-feudalistic grant of a Title-For-Life to government employees.

            You’re only a Senator while you are in the Senate. You are only a Secretary while you are running a Department. You are only a President while you hold the office.

            1. The more I think about it, the more I think the Swiss had the right idea with their collegial presidency.

            2. Of course. All libertarians are weirdo libertarians.

        2. I’m talking about in the comments sections on websites. Just to be sure I wasn’t crazy, I went back and looked at a lot of old online articles about BOOOOSH!, and sure enough, it usually wasn’t capitalized (regardless of whether it was in the article itself). I see it capitalized all the time in comments now, which is what struck me as odd.

      3. It is capitalized when there is no “the” in front of it. Then it is a proper noun. Without the “the” it’s just a regular noun.

        1. Good point. “President Obama”, but “the president, B. Obama”. But what about if you use “the president” to refer to the specific individual? Should that be capitalized? I’m inclined to say yes, but it occurs to me that I don’t really care.

          1. But what about if you use “the president” to refer to the specific individual? Should that be capitalized?

            When you say “the president” you’re not using it as a title. If you say “Mr. President” then you are.

      4. i just used the all caps for emphasis. I didn’t mean to start a grammar debate.

    2. Maybe I am just old fashioned but I am pretty sure the PRESIDENT OF THE UNITED STATES as the chief executive could stop this from happening right now by ordering the regulators and federal prosecutors to stop doing it.

      And what happens if they don’t follow his order? Nothing. That’s what would happen.

      Even a bill won’t matter. Remember what happened after a bill was passed that prohibited federal prosecution of providers in states where marijuana is legal? The prosecutions have continued.

      Prosecutors are going to do whatever they want, and nothing else is going to happen.

      1. You know, somebody (I forget which website) wrote an article on the Chinese economic mess the other day that made this point. They stated that regardless of what the leadership declares, there are too many vested interests who don’t want to lose power, and they just don’t comply with the directives. The central gov’t had announced a reduction in steel output for years, but the gross steel output actually continued to rise, because local politicians simply refused to comply with the order to cut, due to lining their pockets from all the sales.

        It’s become much the same way here. The bureaucracy is entrenched and ossified to the point of an independent existence from the ostensible authority from which is springs.

        1. Found it. It’s on…Vox. But still worth a read.


        2. My work takes me to a federal building from time to time, which changes leadership every few years. One day I asked one of the drones if a new Captain ever changed anything, and she immediately snorted. She said something to the effect of “We do what we do, and no one can do anything about it.”

          1. Spirt of Sir Humphrey lives!

      2. US Attorneys are appointed and serve at the pleasure of the President. If he told them to do it, they would do it. And you can’t so much as scratch your ass as a AUSA without the permission of the local US Attorney.

        1. I believe the Attorney General’s appointment is taken under review by Congress. So there is a check against the President’s power. President Obama’s appointment of Eric Holder was unstoppable in the wake of the Democratic party’s landslide election in 2008. But with almost full control of Congress the Repulicrats confirmed another SJW. Lorretta Lynch, with hardly a peep of dissent.

          1. But she was nice and was one of them. What a disgrace.

  11. [As required by the H&R Style Book:]

    This will need to be addressed in a Joint Session.

    [RIP, George Carlin!]

  12. A bit OT, but it’s July!

    I do my business banking with Chase. June was LGBT*whatever awareness month. So every time I inserted a check in the kiosk I was informed of this. Black History Month was February. December is coexistance month. But there are still several months each year with no theme.

    Too late for July, but August needs a theme.

    1. Severe Periodontal Disease Awareness Month?

    2. June was LGBT*whatever awareness month

      Its “LGBTQWERTY”

      1. I’m surprised the furries haven’t pushed for a place in the alphabet soup yet…

        1. Which month is dog-fucker month?

    3. It is funny as hell to listen to lefties rage against the evil corporations. The reality is they could never hope to enforce the kind of cultural conformity they so crave in a world without large corporations to do it for them.

      1. That is a good observation. Very few of the nice things that people of any political stripe like about the modern world could happen without something like large multinational corporations.

        Without large, multinational, mostly a-political organizations like corporations, the world would be a much more fractured and divided place, probably with a lot more violence and racism too. There is just no end to the idiocy and hypocrisy of the anti-corporate left.

    4. Weed Month?

  13. I am surprised nobody has tried a BTC/$$$ middleware layer into legal banks for legal dope establishments and their suppliers (the ‘network’). Dope merchant dumps their cash into the BTC middleware-bank, then uses BTC in the network for all their dopey-biz-things (product, botany, capital inputs), then converts BTC at said middleware outfit back into cash to settle accounts with outside world (payroll, rent, taxes) every two or four weeks or whatever.

    BTC outfit could allay fears of conversion volatility by insuring redemption value of deposited BTC for same initial amount of $$$ (for a small overhead transaction fee, of course). This ties hand of BTC outfit having to keep (at very least) high fraction reserve in cash for liquidity events – however the BTC outfit would make money on all conversions (sub 1-percent) and arbitrage.

    1. I have a feeling the feds would call that “Money Laundering”.

  14. I’d like to think that any assortment of our Constitutional rights could be used to defend the right for a business to open a merchant account, but between the way the Commerce Clause has been interpreted and John Roberts using a blindfold and a dart board to make his decisions, who knows what the Constitution really means anymore?

    For all we know, in Roberts’ mind, this law would be illegal because it might interfere with the government’s right to force us to eat broccoli.

    1. Can the government make it illegal to open a bank account for an illegal activity? Sure they can. That, however, is not what is going on here. What is happening is the federal government is bullying banks to stop providing services to otherwise legal activities the government doesn’t like.

      That is not so much a rights issue as a due process issue. The government can’t deprive you of your ability to engage in legal activity without some measure of due process and a reason.

      1. Well, they aren’t *supposed* to, anyway.

      2. That is not so much a rights issue as a due process issue. The government can’t deprive you of your ability to engage in legal activity without some measure of due process and a reason.

        Constitutional anything relative to one’s bank account is inoperative in practice. Government can lien an account, spy an account, freeze an account – anything it wants – administratively. It is ‘illegal’ for citizen not to report (or, worse, consciously hide) any bank account and its assets. Banks are required to rat on their customers.

        The capricious modern police state’s cornerstone is banking. Guns, money, sex, drugs – in that order – are inflection points for social control by any aspiring totalitarian. Guns have been a hard nut to crack politically, but banking of any consequence is pretty much a government-sanctioned oligarchy in the USA – with all the due process for ‘little people’ such a situation implies.

        1. Pretty much. But this is a new level. They are not even pretending the person is doing anything illegal. In fact, they are admitting it is legal. If they thought it was illegal, they could as you point out just freeze the account. They don’t do that because they admit what the person is doing is perfectly legal. So instead they bully the bank to shut down the account because they can’t.

          And yes, banking is the key. This is why the feds hate cash so much and would go to a cashless society if they could. A cashless society would give them the ability to freeze anyone they didn’t like completely out of economic life.

          They also really hate prepaid debit cards. They are doing their best to kill those but they haven’t quite figured out how just yet.

      3. The government can’t deprive you of your ability to engage in legal activity without some measure of due process and a reason.

        Who’s going to stop them? No one. So yes, they indeed can.

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