On Friday, the federal government released a memo (.pdf), telling banks how they could work with legal marijuana businesses in Colorado, Washington, and elsewhere.
The memo is being billed as a “green light” for banks to work with the legal weed industry, but the text of the memo reads like anything but. The federal government essentially told banks that accepting marijuana cash still breaks federal money-laundering laws, and if banks chose to do so, they should file a bunch of extra reports to the government that would likely constitute self-incrimination.
No major bank is going to touch pot shops with a ten-foot pole after reading this memo. However, maverick bankers in the West with nothing to lose and an axe to grind might set up special credit unions to exclusively deal with this quasi-legal money.
Frank Keating, president and CEO of the American Bankers Association, stated Friday that the memo isn’t good enough.
"As it stands, possession or distribution of marijuana violates federal law and banks that provide support for those activities face the risk of prosecution and assorted sanctions."
The Colorado Bankers Association (CBA) pooh-poohed the memo in a statement from CBA president and CEO Don Childears.
"After a series of red lights, we expected this guidance to be a yellow one," he continued. "This isn't close to that. At best, this amounts to 'serve these customers at your own risk' and it emphasizes all of the risks. This light is red."
Still, it’s better than the White House saying nothing, or saying that it will actively pursue any bankers who service pot shops.
“This weak tea may be pretty much the best that the Obama administration can do under current law,” writes Jacob Sullum for Reason.com, “which is why bankers are calling for congressional action to address the tax, regulatory, and public safety issues raised by forcing marijuana suppliers to deal exclusively in cash.”
Sadly, the phrase 'congressional action' is an oxymoron.