PNC Bank closed two advocacy groups’ accounts, but so far other banks are not following their lead.
This summer, PNC Bank closed the accounts of two major cannabis advocacy groups, stating that it “couldn’t afford the risk.” Banks have always refused to open accounts for admitted canna-businesses thanks to the continued federal prohibition of marijuana, but advocacy groups have generally been considered safe because they do not directly handle the drug. The PNC closures left advocates concerned that banks across the country were about to take a harder stance against businesses that indirectly dealt with weed.
According to Marijuana Business Daily, so far, it seems like the closures were specific to PNC and not the beginning of a new bank crackdown. The Marijuana Policy Project and NORML, the two organizations who lost their PNC Bank accounts this year, have already found new banks willing to take them on. Separately, Aaron Smith, executive director of the National Cannabis Industry Association (NCIA), said that his group has good relations with a number of banks.
“I think that it’s somebody at a particular bank compliance department that’s overreaching in their interpretation of Department of Justice policy,” Smith said of the PNC closures. “These are legal nonprofits that are recognized by the IRS as tax-exempt organizations. And the IRS, which is a division of Treasury, does not grant tax-exempt status to illegal businesses. For us to get the non-profit status, we have to, in great detail, describe the services we provide and why we earned that tax-exempt status.”
“I don’t think there is necessarily a concerted campaign from the federal government contacting banks, telling them not to do this,” said an anonymous spokesperson from another cannabis advocacy group. “I think there have been some communications between the federal government and banks, and when something comes across someone’s radar, that’s what activates scrutiny.”
The spokesperson said that they would only speak on the banking issue anonymously, because media attention might draw unwelcome scrutiny from their own bank. “Part of not getting banks to close down your account is not being in articles about banks closing down accounts. This is a radar issue.”
credit:420intel.com
