DENVER — Wednesday, Oct. 2, 2013 — Gov. John Hickenlooper and Washington Gov. Jay Inslee today called for flexibility in the federal banking regulations that will allow state-licensed marijuana producers, processors, and retailers access to the banking system.
“Colorado and Washington are in the process of implementing citizen initiatives permitting the production, processing, and sale of marijuana to adults for recreational use, in compliance with state law,” the governors say in a letter together. “Access to the banking system by these state-licensed businesses is a necessary component in ensuring a highly regulated marijuana system that will accurately track funds, prevent criminal involvement, and promote public safety. In order to achieve the mutual federal and state goal of establishing tightly-controlled marijuana regulatory systems, we urge you to issue inter-agency guidance that will allow legal, licensed marijuana businesses access to the banking system.”
The letter was sent to Jacob Lew, Secretary of the Treasury; Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve; Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation; Thomas Curry, Comptroller of the Currency in the Office of the Comptroller of the Currency; Richard Cordray, Director of the Consumer Financial Protection Bureau; and Debbie Matz, Chairman of the National Credit Union Administration.
The letter calls on federal banking regulators to provide guidance to enable the banking industry to offer full banking services to state marijuana licensees.
“It is apparent through the work of our state regulatory agencies and testimony before the U.S. Senate Judiciary Committee that, absent a means to properly account for the significant amounts of cash generated by licensed marijuana producers, processors and retailers, our states’ and (U.S. Department of Justice’s) interests in promoting public safety and preventing diversion of marijuana and criminal activity will be exceedingly difficult,” the letter says.
For example, the letter says, both states will soon be licensing hundreds of retail stores, each of which will, without a normal banking relationship, be forced to conduct business on an all-cash basis. “This creates an unnecessary inviting target for criminal activity,” the letter says.
Enabling marijuana producers, processors and retailers to accept credit and debit cards, accept and deposit cash and checks, and pay third parties by credit or debit cards, check or wire transfer, would reduce the amount of cash in the system.
“Permitting normal banking relationships for state marijuana licensees would also assure a means of tracking the flow of funds, and prevent diversion of marijuana proceeds to illegal activities and to states and foreign jurisdictions in which marijuana remains illegal,” the letter says.
The governors ask federal banking regulators to work with the USDOJ, the Financial Crimes Enforcement Network, the Office of Foreign Asset Control and the Internal Revenue Service to provide a highly controlled banking solution within the scope of present laws to help Colorado and Washington conform to the USDOJ enforcement priorities.
“Presently, there are a host of banks and credit unions in Colorado and Washington that we understand are willing to provide normal banking relationships to state marijuana licensees,” the letter says.
A copy of the letter signed by both governors can be found here.