A solution to the pot industry’s lack of banking services apparently wasn’t found at a closed-door meeting today of high-level regulators, law enforcement and industry representatives in Washington, D.C.
Treasury Secretary Jack Lew said he understood the urgency of the problem and the “serious challenges” facing an all-cash, legal pot industry that would exist in Colorado and Washington states without banking services.
But, responding to questions from U.S. Rep. Denny Heck, D-Olympia, Lew wouldn’t commit to a timeline to fix the dilemma.
Banks now refuse to provide services to legal marijuana businesses because of the federal prohibition of all marijuana. Some in the pot industry hope regulators and law enforcement can come up with a solution short of a congressional change to drug laws, which is not expected any time soon.
Treasury spokesman Stephen Hudak confirmed a lengthy conversation took place today among members of the Bank Secrecy Act Advisory Group (BSAAG), a group of regulators, law officers and bankers that convenes at least twice a year to evaluate financial laws and rules.
But Hudak said he couldn’t comment on details of the meeting. Under federal law, the meetings are closed to the media to assist the frank exchange of ideas, he said, between financial industries, law enforcement and regulators. The BSAAG routinely deals with issues such as the federal money-laundering law.
“These are complex issues that will require a lot of time and talent to work through,” Hudak said.
Earlier today, during a House Committee on Financial Services meeting, Heck emphasized the dangers of an all-cash industry to Lew. “It’s setting out the welcome mat to organized crime and disorganized crime,” Heck said.
Lew said he understood, looked forward to seeing the work of the BSAAG, and would be glad to follow-up with Heck and Congress.
A spokesman for Heck said the congressman is looking forward to a response as “quickly as is reasonably possible,” noting that Washington state’s implementation of voter-approved legal pot is in the business-licensing phase and that retail shops are expected to open as early as May.
Banking representatives in Washington state and Washington, D.C., did not have information about the meeting immediately after it ended.
“The tide of public opinion is turning ever more quickly in support of regulated marijuana markets and, in 2014, at least six states will be implementing new regulations for these markets,” said Aaron Smith, executive director of the National Cannabis Industry Association . “It is long past time for the federal government to stop putting citizens in harm’s way by denying legally recognized businesses access to secure banking services.”