by. Henry Meier
Yesterday, New York’s Assembly passed a bill that would legalize the possession of Marijuana for medical purposes in New York State. If the Senate and Governor agree with the Assembly, then New York would become the 22nd state that has legalized, to some extent, Marijuana possession. The problem is that Marijuana possession is illegal under federal law.
Recently, the WashingtonTimes reported that gun advocates are concerned that the administration ispressuring banks to stopproviding bankingservices for gundealers. In a blog, the Justice Department explained that it wasnot trying totake away the rights of law abiding citizens but simply clamp down on illegal activity. I purposely chose two examples from opposite ends of the political spectrum to highlight a disturbing trend: increasingly, regulators and law enforcement officialson both the state and federal level are picking and choosing the laws they think should be enforced more aggressively and those that they do not and then pressuring financial institutions togo along to get along.
For instance, as I’ve explained in a previous blog, the Justice Department issued guidance to credit unions and banks explaining the conditions under which these institutions could open accounts for pot businesses and still be in compliance with the BSA. As explained by the Northwest Credit Union Association in an April 17th posting, state regulators are encouraging financial institutions to set up accounts because, after all, there is a difference between a law and the decision about whether or not to enforce it.
Here’s my concern. whether you are a Republican, Democrat, Socialist or Anarchist, financial institutions ultimately have a difficult enough job to do without picking and choosing whose money to accept and under which circumstances. The existing BSA framework, for all its faults, is widely understood and does not seek to penalize financial institutions for accepting deposits, but rather provides a mechanism for law enforcement officials to investigate suspicious financial activities. What we are seeing with issues as diverse as consumer lending laws and drug possession is an appropriation of banking to accomplish policy aims that have absolutely nothing to do with financial institutions or the role they should play.
