Pub. 3 2013-2014 Issue 5

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 March • April 2014 7 CEDCO Small Business Finance Corporation Your Best Soursce for SBA Real Estate Loans New Easier Qualification Uninterrupted access to money through a monthly SBA-backed bond auction Low fixed-rate financing Low down payments CEDCO Small Business Finance Corporation Colorado’s SBA 504 Loan Expert TM 1175 Osage Street, Suite 110 Denver CO 80204 Denver 303-893-8989 Grand Junction 970-243-1852 www.cedco.org  More stability for your operation  A stronger balance sheet  An asset to sell when you’re ready AS A LEADING SBA 504 LENDER WE MAKE IT EASY FOR YOU  Buy, Build, Remodel or Expand Real Estate  Purchase and install long-lasting equipment  Fast, expert processing - with low loan costs  Refinance may be an option  We lend up to $5 million: borrow up to $20 million when combined with bank financing  Interest rate as low as 5.25%, fixed for 20 years  Down payments range from 10% to 20%  Most small Businesses are Eligible STREAMLINED PROCESSING  Front Range and mid-mountains call Jeff or Mary Jane 303-893-8989  Western Colorado call Pat 970-243-1861 federally illegal activities, even if a customer attempts to disguise the true nature of an account or a deposit’s origin. Some bank customers have gone to great lengths to disguise accounts related to marijuana, even spraying deposited cash from “Susie’s Cookies” with Febreze air freshener, for example. But banks, as required by these laws aimed at fighting organized crime and terrorism, are on the lookout for attempts at money laundering and must file Suspicious Activity Reports (SARs) if anything appears amiss – and pot-related deposits fall in that category. Last year, about 1.6 million SARs were filed in the U.S. and 342 people were sentenced to an average of 40 months in prison as the result. Bankers face criminal and civil penalties should they fail to act on their suspicions. These laws can’t simply be swept aside; they are both technically and politically complex. Regulators can impose various civil money penalties, cease and desist orders, fines and can ban bankers from their ca- reers for life, should they violate federal law. To provide services tomarijuana busi- nesses, a bank would require numerous “green lights.” To date, banking has seen only “red lights” from federal laws, the Department of Justice, bank regulators and others, and the guidance issued on Feb. 14 proved to be an orange light at best. Among needed “green lights” are: de- tailed in-hand guidance frombank regula- tors about legal and regulatory obligations and a high probability of no regulatory action against a bank. Others needed are internal regimens to comply with numer- ous laws requiring special handling and massive reporting onmarijuana deposits, and a low likelihood of private litigation, as well as the go-ahead from banks’ own attorneys. Additionally, a low prospect of prosecution now or in the future must be secured. Some have advanced the idea of a state-owned bank as a solution, but it won’t work. While a state can own its own bank, the moment it connects to the payment system with checks, ATMs, debit or credit cards, internet banking or wire transfers, federal law applies to it, the same as any other bank. State own- ership would do nothing other than to conveniently aggregate marijuana-related deposits in one location for federal seizure. Governor Hickenlooper has pressed for an answer. H.R. 2652 by U.S. Representative Perlmutter and others could accomplish a solution by prohibiting federal regulators from punishing any bank servicing marijuana businesses in states where it has been legalized and regulated. Banking services would greatly resolve state regulation and taxation issues, serve customers and businesses in legal transactions and help public safety. Only Congress can make that happen. n Don Childears, CBA President/CEO