Pubdate: Fri, 31 Jan 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: David Migoya

PUEBLO BANK BALKS AT POT-SHOP ATMS

Head of Machine-Sponsoring Company Points to Federal Law

Pueblo Bank & Trust, one of the nation's major bank sponsors for 
privately owned ATMs, has told providers it will not allow machines 
to be placed in or near marijuana-selling businesses.

That prohibition is likely to continue, bank president Mike Seppala 
told The Denver Post, even if the federal government changes or 
softens rules prohibiting banks from doing business with the 
marijuana industry.

"Federal law says that it's an illegal drug; we are federally 
regulated and abide by what the federal law says," Seppala said in an 
interview. "We have made it clear we will not allow them in those 
establishments. It's not that we can't do it; we choose not to. 
Dispensaries and ATMs fly in the face of (federal law), and the whole 
purpose behind it is to keep the drug industry at bay."

But should federal rules be softened to allow legal marijuana 
businesses to access banking services - as is expected to occur in 
the next several weeks, according to U.S. Attorney General Eric 
Holder - Pueblo Bank & Trust isn't likely to budge.

"We don't see any reason to change that unless required to," Seppala 
said. "Given the current makeup of my board and management, I can't 
see loosening of our rule even if the federal government eases up."

Marijuana remains an illegal drug under federal law, and banks are 
barred from doing business with that industry, even though 
recreational marijuana sales in Colorado were legalized Jan. 1. ATMs 
require access to bank accounts for the transactions to be properly 
credited, but dispensary owners technically are barred from owning 
them - unless they were to create a different business just for the ATMs.

Pueblo Bank & Trust's staunch position is in part because ATMs not 
tied directly to a bank - there are more than 220,000 privately owned 
nationwide, but no specific number exists - can be an easy tool for 
money laundering.

"Absolutely, they are an easy money-laundering tool, and we will not 
be a sponsoring bank for any of them," Seppala said. "But it's an 
absolute given they have been utilized for money laundering."

Colorado does not regulate privately owned ATMs, as some states do, 
nor does it require them to be registered or licensed, leaving 
unclear where they are located or who owns or operates them.

Bank-owned ATMs are federally regulated and must comply with specific 
rules. Private ATM owners must be vetted by the networks that allow 
them access, but banks ultimately bear the responsibility of who's 
allowed into the system.

The Denver Post recently reported that MetaBank in South Dakota, 
another major sponsor of privately held ATMs, instructed providers to 
remove the machines from marijuana dispensaries and avoid placing them there.

Other sponsor banks might have followed suit, but there is no 
comprehensive database of which banks sponsor ATM access.

Seppala estimates that Pueblo Bank & Trust sponsors ATM providers who 
handle more than 5,000 machines, many of them located in states where 
medical marijuana sales are legal.
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MAP posted-by: Jay Bergstrom