Why Are Politicians Blocking Federal Banking Services for Legitimate Cannabusinesses?
On February 13th, twelve members of the U.S. House of Representatives, including Reps. Ken Buck and Doug Lamborn from Colorado, sent a letter stirring further pessimism for cannabis banking to Chairman of the Senate Committee on Banking, Housing and Urban Affairs, Mike Crapo. Back in December, Chairman Crapo raised a number of public health and safety concerns with the Secure and Fair Enforcement (SAFE) Banking Act, a federal bill that would allow cannabusinesses access to banking services. The Representatives’ letter lauded Chairman Crapo’s concerns and encouraged him to maintain his opposition to allowing access to federal banking for dispensaries, cultivators, and other legitimate cannabusinesses.
The condemnation around giving legitimate businesses access to the federal banking system comes less than a few months after federal and state bank regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Financial Crimes Enforcement Network, announced that banks no longer have to treat hemp growers and business as suspicious. This meant filing burdensome additional SAR (Suspicious Activity Report) paperwork – essentially treating hemp growers and companies as if they were suspected of criminal activity. To boot, the removal of these barriers was further reiterated in late February by the St. Louis Federal Reserve Bank.
SAFE Banking Act
But the SAFE Banking Act is still alive. On September 25th, 2019, it passed the House, and has spent the six months awaiting approval from Congress. Unfortunately, the 116th United States Congress is too worried about maintaining its control of the legislative branch to move forward with a bill they perceive as potentially risky in an election year.
As I’ve said before, access to the to federal banking system would create enormous economic opportunity for the cannabis industry. Banking at the highest level gives companies access to public offerings, public markets, and institutional capital, exactly what’s needed for the U.S. to gain its position as the center of global cannabis finance.
Conservative Lawmakers and Traceable Bank Records
Why does it seem that conservative lawmakers don’t want marijuana businesses to have traceable bank records? These records, which of course, are how a business can be held legally accountable for its financial dealings. Blocking the ability for businesses to keep legitimate banking records only makes it more difficult for legitimate actors to distinguish and protect themselves from those that aren’t.
What’s especially frustrating is to see Colorado politicians fail to support an industry that has thrived in their own electoral district. Taking a stance that continues to treat legitimate businesses as criminal enterprises suggests these politicians are in denial about the validity of the industry – one that’s keen on the power of lobbying.
Isn’t supporting policy that benefits the cannabis industry a clear strategy to help politicians stay in office in a state like Colorado? Especially given the proven track record of registered voters in their state to use the power of the ballot. The progress that cannabis has made in the last two decades has come by-and-large from the power of States’ Rights. It seems a great disservice to refuse to honor the freedom of choice and individual judgment when the people have spoken loud and clear. If you plant ice, you’re gonna harvest wind.