Representatives urge Treasury Secretary to Protect Banks Working With Marijuana Dispensaries
Although the “states rights” controversy was theoretically dealt a death blow as a result of the Civil War, controversies regarding federal preemption and other state vs. federal smackdowns still occasionally raise their ugly heads.
One of the latest debates having to do with this issue surrounds national banking institutions and their boycott of working with medical marijuana dispensaries. Although legal in 14 states, federal law prohibits medical pot dispensaries. This means that state banks are much more likely to work with these dispensaries than are national institutions.
Bank of America, Chase and U.S. bank all refuse to work with these businesses; Wells Fargo announced that of this month, they are no longer opening accounts on their behalf, either (San Francisco Chronicle).
As part of his campaign, Pres. Obama made it clear that as long as medical marijuana dispensaries were in compliance with state regulations, the government would make no proactive effort to prosecute them. In October of 2009, U.S Attorney General Eric Holder emphasized this position, advising federal prosecutors not to use their limited financial resources to go after dispensaries who are in “clear and unambiguous” compliance with the law.
Now, fifteen US representatives have written a letter to Treasury Secretary Timothy Geithner urging him to declare a similar proclamation by making it clear that national banks who do business with medical marijuana dispensaries will not be pursued or targeted.
In the letter, the representatives contend that if some relief is not granted to these dispensaries in this regard, they will be forced to operate on an all-cash basis, which all but screams “potential tax fraud.” Already, many banks that deal with dispensaries refuse to process their credit card transactions for them because of the risk of charge backs.
They are also urging Geithner not to pursue these banks under national money laundering laws.
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