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October 19, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

CT and NY AGs back federal bill to open banking to marijuana businesses

Connecticut Attorney General William Tong and his New York counterpart Letitia James have joined a bipartisan coalition of 38 state and territory attorneys general calling on Congress to pass the federal Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595), which would enable marijuana-related business to have access to the federal banking system.

Federal law prohibits financial institutions from providing products and services to companies in the medical and retail marijuana industries. Complicating matters was a decision last year by then-Attorney General Jeff Sessions to rescind an Obama administration policy of non-interference with state laws where marijuana-related businesses operate.

In 2018, New York’s Department of Financial Services issued a guidance saying it would not take regulatory action against state-chartered banks or credit unions that accept marijuana businesses as customers, provided they follow the 2014 federal Financial Crimes Enforcement Network guidelines. However, most marijuana-related businesses around the country rely on cash transactions for paying employees and vendors.

“Denying licensed medical marijuana-related businesses access to the federal banking system creates unnecessary vulnerability and safety risks,” said Tong. “Businesses that are forced to operate as cash-only makes them targets for criminal activity, and makes it more difficult to track revenues for tax and compliance purposes.

“I join state attorneys general across the country in urging Congress to pass the SAFE Banking Act to give these businesses – legal under state law – access to the same regulated banking system as other businesses,” Tong said.