Pubdate: Sat, 08 Feb 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Author: David Migoya


The expected federal guidance on how banks should deal with legal
marijuana businesses is little more than a misguided effort to "change
water into wine," the state's largest banking association says.

"The only real solution is an act of Congress, which isn't likely in
the near future, though needed," Colorado Bankers Association
president and CEO Don Childears writes in an opinion piece submitted
to The Denver Post.

"Put simply: Banks need the permanence of law versus changeable
guidance," Childears writes.

Bankers have been increasingly wary of offering services to marijuana
businesses - most will not, and those that do are quiet about it -
because federal laws still list marijuana as an illegal drug in the
same manner as heroin and cocaine.

Federal authorities have indicated that "yellow-light" guidance was
likely forthcoming from the U.S. Department of Justice, which
prosecutes drug violations, and the U.S. Department of the Treasury,
under whose authority banking regulators reside.

Legal-marijuana advocates were bolstered by U.S. Attorney General Eric
Holder's statements at the University of Virginia in January that
policy adjustments were being discussed to deal with the unintended
clash between state and federal laws: piles of cash lying around
because marijuana businesses cannot bank.

In a separate four-page position paper, the CBA outlines the variety
of issues bankers face in doing business with marijuana shops.

Guidance "cannot change the fact that marijuana is against federal
law," the CBA says in the paper. "It cannot change water into wine."

And any guidance is not enough to move bankers from their leery seats,
Childears said in the opinion piece, which is as yet

"Bankers face criminal and civil penalties should they fail to act on
their suspicions" of reporting financial transactions from known
illegal businesses under federal law, such as marijuana shops,
Childears writes. "These laws simply can't be swept aside."

The issue, Childears writes, is that the authority over banks is not a
prosecutor's choice to look the other way but rather regulators who
wield a weightier level of power.

"Regulators can impose various civil money penalties, cease and desist
orders, fines and can ban bankers from their careers for life, should
they violate federal law," Childears writes.

That means bankers aren't likely - though some have expressed an
interest-to bank marijuana businesses no matter what policy shift
occurs from Holder's forthcoming statement.  
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