Underbanked: Cooperative Banking as a Potential Solution to the Marijuana-Banking Problem
Patrick A. Tighe*
Numerous states have recently legalized recreational marijuana, which has created a burgeoning marijuana industry needing and demanding access to a variety of banking and financial services. Due, however, to the interplay between the federal criminalization of marijuana and federal anti-money laundering laws, U.S. financial institutions cannot handle legally the proceeds from marijuana activity. As a result, most financial institutions are unwilling to flout federal anti-money laundering laws, and so too few marijuana-related businesses can access banking services. This Note argues that the most viable policy option for resolving this “underbanking” problem is a financial cooperative approach such as a cannabis-only financial cooperative. Even in light of federal anti-money laundering laws, this Note contends that the Federal Reserve is legally authorized to grant some cannabis-only financial cooperatives access to its payment system services under the Monetary Control Act of 1980.
* J.D., May 2015, University of Michigan Law School. I would like to thank Professor Michael Barr for his invaluable insight and direction on this Note. I dedicate this Note in honor of my mother, Billie Ruth Tighe, and my uncle, Mike Faubion.