WASHINGTON—Two members of a House appropriations subcommittee recently pressed a top U.S. Treasury Department official on the issue of banking access for the marijuana industry.
At a hearing, Rep. Mark Amodei (R-NV) commented on what he described as a double standard whereby private sector cannabis businesses are put through hoops to secure bank accounts while government entities are able to deposit tax revenue from cannabis sales into federally regulated institutions and “there is no scrutiny whatsoever,” Marijuana Moment reported.
The congressman said he generally understood why banks like Wells Fargo, which “hasn’t had a great couple of years,” would be sensitive to federal drug laws and avoid servicing state-legal cannabis businesses.
He gave another hypothetical example of a bank rejecting a “plumber, who may have done work on a rental property for the landlord, which is leased to somebody who grows or distributes King’s X,” which appeared to be a reference to a strain of cannabis called King’s Cross, Marijuana Moment reported.
‘Maybe Not OK’
That situation is “maybe not OK,” Amodei said.
“I’m not trying to put that all on you because Congress has to fill a void. I get that,” Amodei told Sigal Mandelker, the Treasury official testifying before the panel. “But right now, status quo is if you’re a government entity, putting your cash from marijuana in a federal depository institution, as near as I can figure, it’s just fine.”
“Why are all the private sector people being told, ‘find a way to launder your money,’ but government political subdivisions are [told], ‘pay the IRS in cash?'” he Amodei. “As a matter of fact, some of them are overpaying them and getting Treasury checks back, so we’ve essentially laundered the money for them.”
Mandelker, the Treasury Department’s undersecretary for terrorism and financial intelligence, didn’t have a specific answer to that question. Instead, she said that marijuana remains federally illegal and there’s nothing her department’s Financial Crimes Enforcement Network (FinCEN) “does or can do in this area changes that.”
“That continues to be the state of federal law,” Mandelker said. “In that context, of course, banks have to make their own decisions about risk-based decisions as we ask them to do in a variety of circumstances about what they are and aren’t willing to bank.”