Pub. 3 2013-2014 Issue 5

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S Despite bankers’ varied attitudes about legalizing mari- juana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities. Colorado can’t regulate or tax an industry for which it can- not trackmoney. Public safety risks associated with cash-heavy businesses cause concern. And, several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. While recent guidance issued by the Department of Justice and the U.S. Treasury is well-intentioned, it provides practically no relief from bank regulatory burdens, and cannot change the fact that marijuana remains illegal at the federal level. Banks must follow all laws. You can’t change water into wine. Banks are responsible to regulators, most of which are independent and uncontrolled by the President’s Executive Branch. The idea of no prosecution is nice, but to banks regulators have the real power. The only real solution is an act of Congress, which isn’t likely in the near future, though needed. Elections can bring a change in guidance – and this directive is now the fourthDepartment of Justice formal position onmarijuana in recent years. Put simply: banks need the permanence of law versus changeable guidance. A number of federal laws now preclude banks from opening accounts related to marijuana. The Controlled Substances Act (CSA) prohibits everyone, including banks, from dealing with controlled substances or the proceeds from them, like the cash from a pot shop. A bank commits money laundering by accept- ing deposits from marijuana activities. The Bank Secrecy Act (BSA), Anti-Money Laundering laws and Know Your Customer doctrine hold banks responsible when customers engage in A Word From CBA ... Banking Marijuana Requires an “Act of Congress”