Businesses need banking services, lawmakers say
Medical marijuana clinics are lawful businesses and the Treasury Department should set rules that encourage banks to provide financial services, according to 15 members of Congress led by US Representative Barney Frank, a Newton Democrat.
"Legitimate state-legal businesses are being denied access to banking services, which does not serve the public interest," the lawmakers said in a May 20 letter to Treasury Secretary Timothy F. Geithner that was distributed yesterday by Americans for Safe Access, a patient-advocacy group.
The letter was written by Representative Jared Polis, a Colorado Democrat whose state is one of at least 14 that have legalized marijuana for medical use. He asks the Treasury to issue "formal written guidance" assuring banks they won’t be targeted for doing businesses with companies that distribute medical marijuana.
Bank of America Corp. and Wells Fargo & Co. are among the US lenders that have stopped opening new accounts for vendors that provide medical marijuana because cannabis consumption and distribution are illegal under federal law.
Wells Fargo is headquartered in San Francisco, the epicenter of the US pro-marijuana movement. Californians will vote in November on whether to legalize marijuana for recreational use.
"If states want to make it legal or not, it should be a state matter," Frank said in a telephone interview yesterday. "It's wrong for the banks to be told by Treasury they can't service them the way they would service any other business."
Andrew Williams, Treasury spokesman, didn't have an immediate comment.
Frank, chairman of the House Financial Services Committee, signed the letter with 12 Democrats and two Republicans, Representatives Ron Paul of Texas and Dana Rohrabacher of California.
Frank and Paul are cosponsors of a bill that would repeal the federal law that makes marijuana use a crime and let states decide whether to legalize it. States that do so then would be able to collect sales tax on marijuana, Frank said.
Denying financial services to medical marijuana dispensaries creates "an increased risk to public safety with potential theft or robbery that any cash-only or cash-reliant business faces," and makes it harder for vendors "to accurately account for tax liability," Polis wrote in the letter.
The decision by big banks to shun an industry that could generate $100 billion in annual sales has created a void and prompted marijuana entrepreneurs to search for alternative financial services providers, said Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws, based in Washington, D.C.
"The scramble is definitely afoot right now for procuring not only competent services, but also fairly priced ones," St. Pierre said.
By Peter Eichenbaum
May 25, 2010