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Federal Regulators Breathe Life into Marijuana Businesses Even as They Seek to Choke Out FFLs

Friday, July 10, 2015

Federal Regulators Breathe Life into Marijuana Businesses Even as They Seek to Choke Out FFLs

By now, knowledgeable members of the pro-gun community are well aware of Operation Choke Point (OCP) and its effect on lawful firearm-related businesses. As we have often reported (here, here, and here, for example), OCP is a deliberate attempt by federal regulators to pressure banks to sever or avoid business relationships with legitimate industries that are considered politically objectionable, including firearms and ammunition sales. The House Oversight and Government Reform Committee has issued reports condemning the participation of both the Federal Deposit Insurance Corporation (FDIC) and the Department of Justice (DOJ) in the program. Internal investigators at both agencies have also launched their own probes into allegations of abusive practices under the guise of OCP.

According to a recent article by State Net (a provider of legal research tools), however, the administration’s use of banking regulators for political purposes goes both ways.

Titled “Cashed Out: Legal Weed Outlets Flush In Cash Struggling To Find Banks,” the piece recounts the “unique problem” facing prosperous marijuana businesses operating legally under state laws that are finding banks reluctant to provide them with services. This is perhaps not surprising, given that marijuana distribution is still, after all, a federal crime, and banks that knowingly do business with marijuana dispensaries could expose themselves to criminal prosecution. According to the article, “That prohibition could even chain out to include security companies that provide legal weed outlets with security or transportation services.”

Yet who’s seeking to “mitigate the problem” of banks shying away from participating in actual criminal activity? Why none other than Obama’s Treasury Department and DOJ. According to the article:

[The U.S. Treasury Department’s] financial enforcement arm, the Financial Crimes Enforcement Network or FinCEN, issued guidelines in 2014 that gave banks a pathway for dealing with marijuana businesses. Those include a requirement that such businesses take responsibility for making sure their marijuana clients are obeying the laws of their state and notify federal authorities of suspicious transactions. Other actions have since followed, including a Department of Justice directive to U.S. Attorneys ordering them not to prosecute banks that deal with pot sellers as long as the banks adhere to federal guidelines.

Considering how lawful firearm and ammunition business have been systematically cut-off from access to necessary financial services by abusive government regulators, we just had to know if this was true. The short answer is “yes.” The administration’s position seems to be that it will ignore unlawful activity it doesn’t agree with, while attacking lawful activity it finds objectionable.

The FinCEN guidance document explicitly sets out to “enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.” In that vein, the document describes DOJ enforcement priorities for marijuana-related enforcement and counsels financial institutions to keep these in mind when making decisions as to whether or not to service marijuana-related businesses. It also provides advice for conducting “customer due diligence” and filing mandatory “suspicious activity reports” of varying detail depending on the bank’s assessment of the customer’s risk profile. The document concludes with reassurance that “FinCEN’s enforcement priorities in connection with this guidance will focus on matters of systemic or significant failures, and not isolated lapses in technical compliance,” and encourages banks to contact the agency with further questions.

DOJ’s memorandum directly addresses “ALL UNITED STATES ATTORNEYS” and is similarly blunt and to the point. While acknowledging that “provisions of the money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act (BSA) remain in effect with respect to marijuana-related conduct,” it points federal prosecutors to a limited list of eight enforcement priorities. These include such things as businesses that divert revenue from the sale of marijuana to criminal gangs and cartels and that “use … firearms in the cultivation and distribution of marijuana … .” It goes on to state, however: “Conversely, if a financial institution or individual offers services to a marijuana-related business whose activities do not implicate any of the eight priority factors, prosecution for these offenses may not be appropriate.” The DOJ memo does, however, insist that is merely “a guide to the exercise of investigative and prosecutorial discretion” and “does not alter in any way the Department’s authority to enforce federal law, including federal laws relating to marijuana, regardless of state law.”

Ironically, a number of the “due diligence” steps the memos mention as a means of facilitating the provision of financial services to state-legal marijuana businesses are, in the context of doing business with firearm-related companies, among the forces driving banks to drop customers. This is likely because banks are being systematically indoctrinated by federal regulators to consider firearm businesses as inherently risky, if not inherently criminal. Yet unlike marijuana sales, sales of firearms and ammunition are not only legal, but even as an Obama-appointed judge acknowledged, protected by the Second Amendment itself.

That’s a distinction that’s apparently lost on the Obama administration, however, which certainly never lets “details” like democratically-passed laws (or even constitutional amendments) get in the way of its relentless political agenda, a defining priority of which is to undermine lawful gun ownership.

 

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California: Governor Newsom Signs Anti-Gun Bills into Law

Friday, October 11, 2019

California: Governor Newsom Signs Anti-Gun Bills into Law

Earlier today, Governor Newsom signed the seven anti-gun bills listed below into law.  

Dick’s Spends Big on Gun-Chopping, Virtue-Signaling Bonanza (But It Will Still Sell You a Firearm)

News  

Sunday, October 13, 2019

Dick’s Spends Big on Gun-Chopping, Virtue-Signaling Bonanza (But It Will Still Sell You a Firearm)

Ed Stack, the CEO of Dick’s Sporting Goods, wants you to know he’s committed to keeping AR-15s “off the street.” But he’s also committed (for the time being) to selling other types of firearms.

Number of Concealed Carry Permit Holders Increased Again

News  

Sunday, October 13, 2019

Number of Concealed Carry Permit Holders Increased Again

Last week, economist John Lott of the Crime Prevention Research Center released “Concealed Carry Permit Holders Across the United States: 2019,” his annual report on the number of concealed carry permit holders in the U.S.

California: Anti-Gun and Anti-Hunting Bill Signed into Law

Monday, October 14, 2019

California: Anti-Gun and Anti-Hunting Bill Signed into Law

Prior to the October 13 deadline, Governor Newsom signed the final anti-gun and anti-hunting bills, AB 1254 and SB 172 into law.  

Member Spotlight: Meet the Police Officer Who Told Congress She ‘Would Not Comply' with a Gun Ban

News  

Friday, October 4, 2019

Member Spotlight: Meet the Police Officer Who Told Congress She ‘Would Not Comply' with a Gun Ban

Last week, a retired Tulsa, Oklahoma law enforcement officer testified in a Congressional hearing that she “would not comply” if Congress passes a ban on firearms. Her bold assertion earned her national media attention and ...

Virginia’s Anti-gun Politicians Put Politics Before Fighting Gun Crime

News  

Sunday, October 13, 2019

Virginia’s Anti-gun Politicians Put Politics Before Fighting Gun Crime

Virginia’s anti-gun politicians are serious about attacking law-abiding gun owners, but are indifferent about actual gun crime. As highlighted in a recent report in the Washington Free Beacon by Stephen Gutowski, the Virginia Department of Justice Services ...

Virginia Police Chief Advocates Ban on All Guns at U.S. House “Assault Weapons” Hearing

News  

Friday, September 27, 2019

Virginia Police Chief Advocates Ban on All Guns at U.S. House “Assault Weapons” Hearing

On Sept. 25, the Democrat-led U.S. House Judiciary Committee held a 3 ½ hour “hearing” entitled “Protecting America From Assault Weapons.” That framing of the issue underscored the erroneous notion that Americans need protection from ...

Grassroots Spotlight: NRA-ILA Fighting the Bloomberg Money In Virginia 2019 Elections

News  

Sunday, October 13, 2019

Grassroots Spotlight: NRA-ILA Fighting the Bloomberg Money In Virginia 2019 Elections

The Nov. 5th election may be the most consequential ever for our Second Amendment rights in the Commonwealth. That’s because every seat in the Virginia House of Delegates and Senate is up for grabs and gun control ...

Guide To The Interstate Transportation Of Firearms

Gun Laws  

Thursday, January 1, 2015

Guide To The Interstate Transportation Of Firearms

CAUTION: Federal and state firearms laws are subject to frequent change. This summary is not to be considered as legal advice or a restatement of law.

NRA Supports Supreme Court Petition Against Massachusetts Semi-Auto Ban

News  

Friday, September 27, 2019

NRA Supports Supreme Court Petition Against Massachusetts Semi-Auto Ban

On Monday, the plaintiffs in the NRA-supported case of Worman v. Healey filed their petition for writ of certiorari before the Supreme Court of the United States. This case challenges Massachusetts’s unconstitutional ban on commonly-owned, semi-automatic firearms as a violation of ...

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Established in 1975, the Institute for Legislative Action (ILA) is the "lobbying" arm of the National Rifle Association of America. ILA is responsible for preserving the right of all law-abiding individuals in the legislative, political, and legal arenas, to purchase, possess and use firearms for legitimate purposes as guaranteed by the Second Amendment to the U.S. Constitution.