POLITICS
02/21/2014 02:54 pm ET Updated Feb 21, 2014

Obama's Marijuana Banking Rules Don't Change Anything, Bankers Say

Last week, the Obama administration announced new guidelines that it portrayed as a drastic change to the way marijuana businesses interact with banking services. Supporters touted the news as a "green light" for pot shops to gain access to traditional financial services, but banking officials say that the guidance, essentially, changes nothing.

“After a series of red lights, we expected this guidance to be a yellow one," Don Childears, president and CEO of the Colorado Bankers Association, said in a statement. "This isn’t close to that. At best, this amounts to ‘serve these customers at your own risk’ and it emphasizes all of the risks. This light is red.”

Steven Brudner, managing director of Merchant Services Consulting Group, told The Wall Street Journal that debit and credit card services will probably not be available to marijuana businesses either, since major credit card-processing banks do not want to expose themselves to the risks that still exist under the new guidance.

Due to the banks' fears of being implicated as money launderers, marijuana-related businesses are often forced into cash-only transactions, putting the retailers' safety at risk and creating issues involving taxes and employee payroll.

Colorado's legal marijuana businesses are already exceeding revenue estimates by the state, and as a result, they're in desperate need of access to banking services. Gov. John Hickenlooper announced this week that the state's total pot sales for the next fiscal year were estimated to reach about $610 million -- that's up more than $200 million from the cannabis industry's earlier estimates of approximately $400 million, annually.

Guidelines announced by the Treasury Department and a memo from a top Justice Department official were intended to ease concerns that the federal government would target banks working with marijuana-related businesses that are legal and regulated on the state level. Expanded banking access would enable them to function like traditional businesses, and implementing a reporting structure would allow the federal government to take a close look at how they operate.

However, the DOJ memo falls short of expressly protecting banks that work with state-legal, state-licensed marijuana businesses from prosecution.

Treasury officials said that they anticipated that the guidelines could encourage smaller and medium-sized banks to deal with marijuana businesses.

But the CBA strongly disagrees, with Childears saying in his statement that "no bank can comply" with these regulations.

"Bankers had expected the guidance to relieve them of the threat of prosecution should the open accounts for marijuana businesses, but the guidance does not do that," Childears said. "Instead, it reiterates reasons for prosecution and is simply a modified reporting system for banks to use. It imposes a heavy burden on them to know and control their customers’ activities, and those of their customers."

"An act of Congress is the only way to solve this problem," Childears added.

Rep. Ed Perlmutter (D-Colo.) has sponsored a bill that would do just that. The Marijuana Access to Banking Act would create the protections for depository institutions needed so they can effectively provide financial services to marijuana-related businesses.

Perlmutter said that although the new guidance is an "important step," much more is needed.

“We need Congress to promptly consider and pass my legislation to provide certainty for financial institutions and the licensed marijuana related businesses to operate just like any other business,” Perlmutter said.

Currently, 20 states and the District of Columbia have legalized some form of marijuana, be it medical or recreational. One study suggests that the U.S. marijuana industry could be valued at over $10 billion by 2019.

ALSO ON HUFFPOST:

  • 1 Former President Bill Clinton
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    Bill "Didn't Inhale" Clinton has supported decriminalizing marijuana for more than a decade and more recently has spoken out against the war on drugs. “I think that most small amounts of marijuana have been decriminalized in some places, and should be," he said back in 2000 in an interview with Rolling Stone. "We really need a re-examination of our entire policy on imprisonment.” He's since spoken about the issue of marijuana and drug prohibition a number of times. Last year, he appeared in the documentary, "Breaking the Taboo," where he argued that the war on drugs has been a failure.
  • 2 Sen. Rand Paul (R-Ky.)
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    Paul exhibited his libertarian tendencies earlier this year when he explained that he'd favor reforming marijuana laws to either decriminalize or reduce penalties for possession. “I don't want to promote that but I also don't want to put people in jail who make a mistake," Paul said. "There are a lot of young people who do this and then later on in their twenties they grow up and get married and they quit doing things like this. I don't want to put them in jail and ruin their lives."
  • 3 Former Rep. Ron Paul (R-Texas)
    As a congressman, Paul took his opposition to marijuana and drug prohibition a step farther than his son has so far. He supported a number of bills that would have removed the plant from its current status as a Schedule I substance under federal law, where it is considered alongside heroin and PCP. Because his history on the topic is so expansive, just take a look at the video to the left for a selection of his comments.
  • 4 Evangelist Pat Robertson
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    While the 83-year-old Robertson may say a lot of things that make him sound like a kooky old man, he's also made a few remarks to endear himself to marijuana advocates. "I really believe we should treat marijuana the way we treat beverage alcohol," Robertson said in an interview with The New York Times in 2012. "I've never used marijuana and I don't intend to, but it's just one of those things that I think: this war on drugs just hasn't succeeded." Robertson has made similar remarks on his "700 Club" show before, but the Times, like many others, perhaps felt they must have misheard him.
  • 5 New York City Mayor Michael Bloomberg
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    In a state of the city address earlier this year, Bloomberg made it clear that he supported a promise by New York Gov. Andrew Cuomo (D) to push marijuana decriminalization. "I support Governor Cuomo's proposal to make possession of small amounts of marijuana a violation, rather than a misdemeanor, and we'll work to help him pass it." A similar effort specific to NYC has made some progress, but faces an unclear path forward with New York lawmakers.
  • 6 Actor Bryan Cranston
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    Some may think of Cranston as more of a meth guy thanks to Walter White, his character on AMC's hit show "Breaking Bad," but in real life he's spoken out against current pot laws, suggesting that recreational marijuana use isn't a big deal -- and shouldn't be treated like it. “[T]o me, marijuana is no different than wine," he said in an interview with High Times. "It's a drug of choice. It's meant to alter your current state -- and that's not a bad thing. It's ridiculous that marijuana is still illegal. We're still fighting for it ... It comes down to individual decision-making. There are millions of people who smoke pot on a social basis and don't become criminals. So stop with that argument -- it doesn't work.”[H/T Marijuana Majority]
  • 7 Former New Mexico Gov. Gary Johnson (R)
    AP
    Unlike many politicians, Johnson, a Libertarian presidential candidate in 2012, has unabashedly admitted using marijuana. But beyond his personal history with pot, he's been an outspoken advocate for legalizing and taxing it. From his campaign platform: "By managing marijuana like alcohol and tobacco - regulating, taxing and enforcing its lawful use - America will be better off. The billions saved on marijuana interdiction, along with the billions captured as legal revenue, can be redirected against the individuals committing real crimes against society."
  • 8 Author Stephen King
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    King hasn't been shy about advocating for a legal marijuana industry that could give easy access to recreational users and revenue to the states. “Marijuana should not only be legal, I think it should be a cottage industry," he said in an interview with High Times. "My wife says, and I agree with her, that what would be really great for Maine would be to legalize dope completely and set up dope stores the way that there are state-run liquor stores.”[H/T Marijuana Majority]
  • 9 Rep. Dana Rohrabacher (R-Calif.)
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    Rohrabacher was a co-sponsor of the 2013 "Respect State Marijuana Laws Act," which seeks to protect marijuana users or businesses acting legally according to state marijuana laws from being prosecuted under the federal Controlled Substances Act. While marijuana has been made legal for various uses in a number of states, the Obama administration continues to enforce federal laws across the nation. This has led to numerous raids of marijuana-based businesses, as well as prosecutions of growers and other people involved in pot.
  • 10 Rep. Don Young (R-Alaska)
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    Young was also a co-sponsor of the 2013 "Respect State Marijuana Laws Act."
  • 11 Rep. Justin Amash (R-Mich.)
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    Amash was also a co-sponsor of the "Respect State Marijuana Laws Act."
  • 12 Glenn Beck
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    Back in 2009, when Beck had a Fox News show, he suggested that marijuana legalization could be a worthwhile solution to raging drug violence on the nation's border with Mexico. "I think it's about time we legalize marijuana," he said. "We have to make a choice in this country. We either put people who are smoking marijuana behind bars or we legalize it, but this little game we're playing in the middle is not helping us, it is not helping Mexico and it is causing massive violence on our southern border."
  • 13 Billionaire Richard Branson
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    From an op-ed by Branson arguing for an end to the war on drugs: "Decriminalization does not result in increased drug use. Portugal's 10 year experiment shows clearly that enough is enough. It is time to end the war on drugs worldwide. We must stop criminalising drug users. Health and treatment should be offered to drug users - not prison. Bad drugs policies affect literally hundreds of thousands of individuals and communities across the world. We need to provide medical help to those that have problematic use - not criminal retribution."
  • 14 GOP Mega-Donor David Koch
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    Koch may have funneled countless dollars to conservative candidates who oppose reforming marijuana laws, but back in 1980, when he was the vice presidential candidate for the Libertarian Party, he suggested that it was "ridiculous" to consider people who smoked pot "criminals."
  • 15 Texas Gov. Rick Perry (R)
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    In 2010, Perry told Jon Stewart that he believed in a federalist approach to marijuana laws -- that is, to allow states to determine their own approach and to tell the federal government to butt out. He's since suggested he'd be willing to support decriminalizing possession of small amounts of marijuana.
  • 16 Comedy Central's Jon Stewart
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    Stewart has made a habit of taking down politicians who exhibit an uncompromising stance on marijuana prohibition. In 2012, Stewart took New Jersey Gov. Chris Christie (R) to task for vetoing a marijuana decriminalization bill. “Alright, as much as I disagree, I don’t think marijuana should be illegal, but it is illegal on the federal level," Stewart began. "Christie is a former prosecutor, a man of conviction, of principle, doesn’t believe that the state should supersede federal law." The praise in the second sentence is a good sign that Stewart is about to shred Christie. Watch the rest of his takedown above.
  • 17 Actor Jack Nicholson
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    In an interview with the UK's Daily Mail in 2011, Nicholson said that he personally still used marijuana, before making the case for ending the prohibition on pot as well as other drugs. "I don't tend to say this publicly, but we can see it's a curative thing. The narcotics industry is also enormous. It funds terrorism and - this is a huge problem in America - fuels the foreign gangs," he said. "More than 85 percent of men incarcerated in America are on drug-related offences. It costs $40,000 a year for every prisoner. If they were really serious about the economy there would be a sensible discussion about legalization."
  • 18 Former Utah Gov. Jon Huntsman (R)
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    In a 2013 American Conservative op-ed chock full of moderate Republican views, Huntsman snuck in a call to "applaud states that lead on reforming drug policy." While Obama and his administration have responded to state marijuana reforms by saying they must enforce federal laws against marijuana, the president has the power to reschedule the drug, which would allow federal authorities to shift resources away from a prohibitive approach.
  • 19 Former Alaska Gov. Sarah Palin (R)
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    Palin spoke out on marijuana in 2010, saying she didn't support legalizing it but also calling it a "minimal problem" for the nation. "However, I think we need to prioritize our law enforcement efforts," Palin said. "If somebody's gonna smoke a joint in their house and not do anybody any harm, then perhaps there are other things our cops should be looking at to engage in and try to clean up some of the other problems we have in society." While Obama has spoken repeatedly about not being interested in prosecuting small-time marijuana users, he hasn't done anything to prevent them from being busted by law enforcement in states where the drug is still illegal.
  • 20 Comedian Jimmy Kimmel
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    Kimmel notably took a shot at Obama while serving as host of the 2012 White House Correspondents Dinner, questioning a continued marijuana crackdown under the president's administration. He then went on to say that the issue of its continued illegality was a serious political concern for many Americans.(Check out the video above.)
  • 21 Former President Jimmy Carter
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    Carter hasn't minced words in expressing his opposition to harsh marijuana and drug prohibition policies. In 2012, the former president said he was fine with state legalization efforts, though he himself doesn't necessary support legalizing the drug. “As president 35 years ago I called for decriminalizing -- but not legalizing -- the possession of marijuana,” Carter said. “Since then, U.S. drug policies have been very horrible to our own country because of an explosion in prison populations.”
  • 22 Former Virginia Attorney General Ken Cuccinelli
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    A staunch conservative who failed in a run for the U.S. Senate last year, Cuccinelli suggested in 2013 that he was "evolving" on marijuana legalization, and that he supported the rights of states to determine their own pot laws. "I don't have a problem with states experimenting with this sort of thing I think that's the role of states," Cuccinelli said, according to Ryan Nobles of WWBT.
  • 23 Columnist Dan Savage
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    Savage slammed Obama for perpetuating the war on drugs while on HBO's "Real Time With Bill Maher" in 2009. “The proof will be in the policy. The war on drugs has gotten a really bad rap, when you ask people if they support the war on drugs they say no ... [Obama's] budget once again has the same old drug warrior policy ... I reject the assumption that everybody who is using drugs needs treatment or is an addict and needs to get arrested ... Not all drug use is abuse.” He's kept up the fight for drug policy reform since.[H/T Marijuana Majority]
  • 24 MSNBC's Al Sharpton
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    Sharpton has repeatedly spoken out in favor of reforming drug laws. In 2011, he suggested that the nation had wasted trillions of dollars in an ill-fated effort that had weighed particularly heavily on the African American community. “We've been fighting the war on drugs since the '60s. And guess what? Trillions of dollars later, we are losing," Sharpton said during a segment on MSNBC. "When you look at the disparities in sentencing drug offenders, hasn't this kind of injustice undermined the legitimacy of our criminal justice system?”[H/T Marijuana Majority]
  • 25 Former Rep. Tom Tancredo (R-Colo.)
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    Tancredo came out aggressively in favor of reforming marijuana laws in 2010, telling the Colorado Independent that the correct path forward was "Legalize it. Regulate it. Tax it." Tancredo continued, “The arguments against marijuana today are the same as the arguments against liquor years ago.” Years later, the former congressman agreed to smoke pot on camera with a documentary filmmaker, a deal that he later backed out of.

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