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Sunday, May 31, 2020  Spokane, Washington  Est. May 19, 1883
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Marijuana banking problems persist

OLYMPIA -- The federal government is offering little help to banking institutions willing to set up accounts for legal marijuana operations, making it difficult to bring them out of an all-cash business that has higher risk of theft and money laundering.

Instead, it has set up "a huge avalanche of additional regulations" for banks and credit unions willing to offer those accounts, members of a pair of legislative committees were told today.

And even with those regulations, there's no guarantee a new administration won't decide to go after banks that accept money from businesses licensed by the state to grow, process or sell a substance illegal under federal drug laws, members of the House Financial Services and Government Accountability committees were told. . . 

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A 2013 memo from the U.S. Justice Department said the federal government had no plans to prosecute people connected with businesses in states that have legalized marijuana, provided the states set up a system that follows eight basic guidelines including assurances the drug isn't being sold to minors, isn't involved in organized crime and isn't crossing state boundaries. 
But federal banking regulations still have strict rules on accepting deposits that involve large amounts of cash, and the major credit card companies like Visa, MasterCard and American Express don't allow marijuana businesses to use their cards.
Russ Rosendal of Salal Credit Union in King, Snohomish and Pierce counties said it takes about 140 hours a year to service a marijuana business's account, about three times that of any other business.
Lynn Ciani of Numerica Credit Union in the Spokane Valley said her institution decided earlier this year to accept accounts from state licensed marijuana businesses to service customers and protect the community, because the prospect of million-dollar cash businesses operating without banking support "was frightening." It spent four months putting together a plan to cover the many aspects of legal marijuana businesses and now has  more than 30 accounts from businesses involved in growing or processing recreational marijuana. It doesn't accept accounts from businesses that sell recreational marijuana at this time, but could change its rule to accept them in the future, she said.
Among the services Numerica can provide are armored car pickups for a business's cash deposits, Ciani said, something many I-502 operations have struggled to obtain because of fears of any federal crackdown on drug money.
"Armored car services won't contract with 502 businesses but they will contract with us," she said.
"How comfortable are you that you're not going to get in a big jam?" Financial Services Chairman Steve Kirby, D-Tacoma, asked.
"We watch it daily to take the temperature," Ciani said.
"In my opinion, you're hanging out there. You're way out on a limb," said Kirby, who explained he also works for a credit union, one which decided against accepting accounts from marijuana businesses despite his urging.
Colorado, where voters also legalized recreational marijuana in 2012, also struggles with banking for those businesses, Andrew Freedman, that state's director of marijuana coordination, told the committee. It has passed a law that would allow for a "Cannabis Credit Cooperative" if no banks or credit unions will accept account. But those assets would not be protected by the Federal Deposit Insurance Corporation or the state, Freedman said. 
Editor's note: Some typos from an earlier version of this story were corrected in this version.

Jim Camden
Jim Camden joined The Spokesman-Review in 1981. He is currently the political reporter and state government reporter in the newspaper's Olympia bureau office.

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