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There's growing pressure to legalize banking for marijuana businesses. Does it matter for Utah?

Utah's state treasurer is helping lead the campaign to get Congress to allow banks to service marijuana-related businesses without running afoul of federal money laundering laws.

FILE - In this May 14, 2013, file photo, medical marijuana prescription vials are filled at a medical marijuana dispensary in the Venice Beach area of Los Angeles. California would likely lose money and face insurmountable federal hurdles if it tried to c
FILE - In this May 14, 2013, file photo, medical marijuana prescription vials are filled at a medical marijuana dispensary in the Venice Beach area of Los Angeles. California would likely lose money and face insurmountable federal hurdles if it tried to create a state-backed bank for the marijuana industry. That's according to a report released Thursday, Dec. 27, 2018, by state Treasurer John Chiang. Chiang blames the federal government for continuing to classify marijuana as a Schedule 1 drug even though its legal in some form in 33 states.
Damian Dovarganes, Associated Press

WASHINGTON — Pressure is mounting for Congress to pass a law that would let banks and credit unions serve marijuana-related businesses without running afoul of federal money laundering laws.

The latest push came from the National Association of State Treasurers, which published a resolution Friday calling for "common sense laws and regulations" for marijuana banking. The message comes as the cannabis industry descends on the nation's capital this week to lobby Congress about eliminating the conflict between states that have legalized marijuana and federal laws that criminalize cannabis.

Some 43 states have legalized marijuana either for medical or recreational use. Utah voters supported legalization of medical cannabis in November and the state Legislature approved a growing, processing and dispensing framework that is anticipated to be fully operating early next year.

The looming deadline has state treasurer David Damschen, who is president of the national association, concerned about how banks can comply with state and federal laws if they service entities involved in the state's medical marijuana program. That would include state and local health agencies dispensing medical marijuana products.

"That definitely complicates things for the banking industry that has typically banked those (government) institutions," Howard Headlee, executive director of the Utah Bankers Association, said earlier this year.

Damschen, a former banker, understands the industry's aversion to federal penalties for serving customers engaged in what would be an illegal drug trade under federal law. He and his counterparts in other states also want to avoid the hazards of businesses operating on a cash-only basis because they have no place to bank their earnings.

"Cash is pretty dumb in our line of work," he told the Deseret News in January. "You want to get away from cash as much as you can for accounting reasons, for safety and security reasons, and efficiency reasons."

The resolution he signed on behalf of the association reiterated the safety concerns of dealing in cash: "Cash-based systems are inefficient, expensive, and opaque, making illicit activity more difficult to track and posing a significant risk to public safety by increasing the likelihood of violent crime," the document stated.

Tales of robberies, kidnappings, murder and other violent crimes against the owners and employees of marijuana businesses were told at a congressional hearing in March on a bill that would shield banks serving marijuana-related businesses from federal laws and regulations.

Before that hearing, Damschen wrote Utah's congressional delegation in March urging them to support legislation that would give marijuana-related businesses easier access to banking services, and let states decide how to manage cannabis within their borders. The Utah Legislature passed a resolution urging Congress to address the issue.

That was followed by Utah Commissioner of Financial Institutions Ed Leary joining regulators from 25 states asking House and Senate leadership to support marijuana banking legislation, Forbes reported. Earlier this month, attorneys general from 33 states, including Utah, wrote a similar letter, according to the Denver Post. And the Marijuana Moment, which first reported the treasurers assocation action, said a group of 17 state treasurers had sent a letter earlier this month to congressional leaders on the issue.

The letter writing campaign appears to be having some effect. The hearing in March was the first for the Secure and Fair Enforcement Banking Act, which was introduced six years ago by Rep. Ed Perlmutter, D-Colo. It passed the House Financial Services Committee and is awaiting a vote from the full House.

Among the bill's 182 co-sponsors are 20 Republicans from states where marijuana is legal. None of Utah's delegation is a co-sponsor, but Rep. Ben McAdams, a Democrat, voted for the bill in committee.

Addressing the issue is less certain in the Senate, where a companion bill has 28 sponsors, according to Marijuana Moment. That bill has the endorsement of the American Bankers Association.

In addition to pressuring Congress to act, the treasurers association's resolution also urges the Trump administration to keep in place existing federal guidelines that have effectively stopped federal banking regulators from strictly enforcing the law against financial institutions operating in states where marijuana is legal.