Banks are shying away from bankrolling legal marijuana retailers in Washington state, according to a recent KIRO Radio story, because they are “worried about uncertainty and unquestionable risk.”
Even though the U.S. attorney general and the U.S. Treasury Department’s Financial Crimes Enforcement Network have provided guidance in offering financial services to legal pot businesses, just one credit union has agreed to help, but only for marijuana growers and processors in Eastern Washington.
Banks fear the possible change in federal policy — which still outlaws marijuana as a Schedule 1 drug — with the 2016 presidential election. If bank-financed marijuana retailers are forced to close and their property seized, the banks won’t get their assets back.
Ironically, these financial institutions did not consider the monumental risks they took by approving $84 billion in unqualified home mortgages, according to Bloomberg, that later defaulted. This resulted in a $700 billion federal bailout of the banking industry in 2008 and the recent recession.
There were more than 30,000 bank repossessions in April 2014 alone, according to RealtyTrac, and many of those previously foreclosed are still sitting vacant as bank-owned properties.
We’re not buying their excuse.