Is it high-time for credit unions to make marijuana-industry loans

Here are some thoughts about whether it’s high time or high crime.

With the legalization of marijuana production and sale to varying degrees under the laws of several states, the ability of credit unions to serve businesses and persons engaging in such production and sale has been a subject of increasing debate. Recently, a CUES member posed the following question on the CUES Net members-only listserv:

We have a member who lives in Colorado and is a marijuana grower. While it is legal in the state of Colorado, can we, as a federal credit union, located in Florida, use his income to qualify for a loan? It is his sole source of income.

While I have no moral objection to either the business or the desire to do the loan, the answer under current federal (and Florida) law is a clear “no.”

Regardless of Colorado law related to marijuana production and sale, such activities are clear violations of United States law. The federal Controlled Substances Act makes it illegal to “manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense” marijuana. As such, the member’s activities are in clear violation of federal law. Moreover, 18 United States Code Sections 1956 and 1957 criminalize most financial transactions related to the proceeds of marijuana activities. Regardless of the federal government’s current priorities (or lack thereof) in prosecuting such crimes, the current lack of vigorous prosecution in certain states is not binding and can change at any time.

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