The group of 20 lawmakers, who mostly represent states where recreational marijuana is legal, said in a Tuesday letter that 2014 guidance from the department’s Financial Crimes Enforcement Network to put “red flags” on marijuana businesses hurts the businesses’ chances of securing banking services or loans.

The warnings from a federal regulator unfairly restrict access to a fast-growing industry that’s legal in many states, the lawmakers said.

“Under this red flag guidance, a marijuana business owner with a marijuana conviction may be permitted to participate in a state licensing program on paper, but in practice may be unable to access a bank loan to grow her business because she is considered a high-risk customer,” the lawmakers wrote.

The guidance disproportionately harms businesses owned by people of color, who are more likely to have a marijuana-related conviction, even though they are not more likely to have broken marijuana use laws, the letter reads.

Sens. Elizabeth Warren of Massachusetts, Jeff Merkley of Oregon, Raphael Warnock of Georgia and Rep. Earl Blumenauer of Oregon led the letter, according to a release from Warren’s office.

Other signers include Sens. Cory Booker of New Jersey, Chris Van Hollen of Maryland, Amy Klobuchar and Tina Smith of Minnesota and John Fetterman of Pennsylvania, and Rep. Val Hoyle of Oregon.

The group asked Treasury Secretary Janet Yellen and Financial Crimes Enforcement Network Director Andrea Gacki to update the guidance, which they noted predates many state laws legalizing recreational marijuana.

The update should allow people who have been pardoned or were convicted of an offense that is no longer considered a crime under their state’s law to have full access to financial services without a red flag from the federal government, the lawmakers wrote.

Messages seeking comment from the Treasury Department and Financial Crimes Enforcement Network were not returned Thursday.

Split among advocates

Access to banking is one of the challenges that marijuana-related businesses face, even as many states have moved to decriminalize or outright legalize recreational use in recent years and it has grown to be a multibillion-dollar industry.

Last year, 22 states brought in a combined $3.8 billion in tax revenue from marijuana sales, according to the advocacy group the Marijuana Policy Project. Recreational sales in Oregon alone are about $1 billion per year.

But because the banking system is largely federally regulated, and marijuana is still illegal at the national level, marijuana-related businesses have trouble gaining access to banking services such as small business loans.

That leaves would-be business owners without the necessary capital to start a business. Existing businesses may carry inordinate amounts of cash, leaving them more vulnerable to theft or robbery.

But efforts to only address issues around banking have split advocates of marijuana reform.

Booker, Wyden and Senate Majority Leader Chuck Schumer of New York introduced a comprehensive marijuana overhaul bill last year, which would decriminalize the drug completely.

Booker and Warnock have opposed bipartisan attempts to deal only with access to financial services, arguing that such reforms would benefit big marijuana businesses and would be unfair to the largely Black and Latino people who still suffer the consequences of marijuana-related convictions in states where it has since become legal.

“My fear is that if we pass this legislation, if we greenlight this new industry and the fees and the profits to be made off of it without helping those communities, we will just make the comfortable more comfortable,” Warnock said at a September hearing on a bill to reform marijuana banking laws.

“And I see no historical evidence that suggests that when we do that we’ll go back and get those left behind,” he continued. “I don’t believe in trickle-down economics, and I don’t believe in trickle-down justice.”

The Senate Banking Committee approved the marijuana banking bill on a bipartisan 14-9 vote on Sept. 28. It has not received a floor vote.

Spokespeople for Warnock did not respond Thursday to messages seeking comment on the Treasury letter.

Booker and Schumer also opposed previous banking overhaul efforts, but Booker said that the addition to this year’s version of the bill, which he cosponsored, to provide states grants to help expunge marijuana convictions, made the bill worth supporting.

Spokespeople for Booker did not respond to a message seeking comment Thursday.

“I’m grateful to my colleagues for working with me to ensure key provisions were included in this bill that will increase access to capital for small and minority-owned businesses and increase banking services for underserved communities,” he said in a statement a week before the committee vote. “Even after this bill is passed, there will be a lot more work to do to reverse the many injustices of our nation’s failed marijuana policies.”