How Anti-Money Laundering Laws Affect Banks and Legalized Marijuana Sales Ms. Bels Tuesday, February 4, 2014 Credits & Debits, The Receipt Photo Credit: NYDailyNews.com The legalization of marijuana, in 21 states and 9 pending (as of January 27, 2014), now faces push back from financial institutions. The urge from financial institutions is for Congress to amend anti-money laundering laws. As of today, the 1986-imposed Money Laundering Control Act (MLCA) is still forcible by law and any individual or institution disobeying the laws set forth will be prosecuted accordingly. The fear nowadays, however, is mainly derived from the banking establishments. Many establishments are leery of accepting money made from legalized marijuana sales. Under the MLCA and it’s corresponding rules and regulations set by Congress after 1986, financial institutions can not accept and store “dirty money”. In the 1980’s, the government notice an influx of money being carried by banking institutions. Many of the individuals depositing these funds were involved in the drug trade, which produced millions of dollars. The monies made, unfortunately, was too much to be stored in home or facility. Therefore, banks began allowing the cartels to make deposits. The deposits were in-turn deemed as capital, which was used many times for opening up local businesses and to purchase real estate. Most of Miami’s South Beach properties was built on drug money. Eventually, the federal government notice these large transactions and decided to impose a new set of laws that will prevent laundering from occurring. Fast forward twenty years, the MLCA is now up for debate and revision. The states in which financial institutions are worried about the laws are: Alaska, Arizona, California, Colorado, Connecticut, DC, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington. Until U.S. policies are changed, most banks will not accept these deposits. Jacob Sullum, writer for Forbes.com, summed it up perfectly… Because growing and selling marijuana remain federal felonies, providing financial services to businesses engaged in those activities can be viewed as money laundering or aiding and abetting drug trafficking. Holder can announce that such prosecutions should not be a high priority for U.S. attorneys, but they won’t necessarily listen, and the policy can be changed at any moment, by this administration or the next. Without new federal legislation, banks accepting marijuana money will always be taking a legal risk. (Forbes) For good reason, banks should be hesitant to accept these funds. Until Congress put the provisions in writing, it is best to stand clear of potential prosecution.
