Cultivating a New Legal Landscape for Community Currencies
Governor Brown Approves CA Alternative Currencies Act
Last week, California Governor Jerry Brown signed into law AB 129 - the California Alternative Currencies Act! Sustainable Economies Law Center and a network of supporters across the state have been advocating for this bill for nearly two years, as it removes an outdated yet significant legal barrier to the continued growth of community currencies and other innovative means of exchange. Thanks to Assemblymember Dickinson and the many community currency supporters who helped pass this important bill for monetary resilience! Read more about the bill here.
SELC Weighs in on California’s Money Transmission Act
State and federal money transmission laws have been a stressful legal topic for complementary currencies lately. Many of these laws went into effect or have expanded in recent years, and they may put up enormous legal hurdles to the creation of new currencies. The interpretation and application of many of these laws remains unclear. However, since the laws are relatively new, the time is particularly ripe to shape the development of the laws. In April, the Sustainable Economies Law Center submitted comments to the California Department of Business Oversight, requesting that draft money transmission regulations exclude or lower barriers for nonprofit or cooperatively structured organizations administering complementary currencies. Information about and a copy of SELC’s comments can be found here.
Education for a New Economy
Upcoming Webinars and Accompanying Live Chat Sessions
Visit our website for more info and to RSVP!
Legal Basics for Time Banks and Barter Exchanges: Live Chat, July 23, 11:00 am PST (Video will be posted a week prior.)
Legal Basics for Complementary Currencies: Live Chat, August 6, 11:00 am PST (Video will be posted a week prior.)
Delving Into Unknown Legal Territory
Sustainable Economies Law Center Has a Legal Resource Library on Community Currencies!
Not everyone knows about SELC's free online legal resource library, CommunityCurrenciesLaw.org, so we thought it would be worth mentioning here. Please spread the word! We have been updating it and adding information lately.
Reading the Laws No One Else Wants to Read
SELC is collaborating with Jenny Kassan of Cutting Edge Capital, and her law student intern, Nicole Schneidman, to survey a long list of laws that may or may not come into play for complementary currencies. This survey will help us to identify potential problem areas for currencies and to identify SELC’s research and advocacy priorities for the coming year. The laws we are researching include the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Trade Commission Act (section on Unfair or Deceptive Acts or Practices), the Credit Card Accountability Responsibility and Disclosure Act of 2009, state escheatment laws, unfair competition laws, pricing laws, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, Unlawful Internet Gambling Enforcement Act, Truth in Lending Act, Article 4A of the Uniform Commercial Code, Gramm Leach Biley Act, and Regulation CC on remotely created checks.
Serving the Legal Needs of Currency and Exchange Projects
Model 501(c)(3) Tax Exemption for Time Banks
In 2013, Sustainable Economies Law Center helped to draft a 501(c)(3) tax exemption application for Arroyo Sustainable Economies Community Organization (ASECO), a regional time bank in Los Angeles, California. ASECO recently received tax exempt status under 501(c)(3), and has made their tax exemption application freely available as a template for other time banks seeking 501(c)(3) tax exemption. Click here to see how we demonstrated the charitable and educational purposes of the time bank to the IRS.
SELC Helped Davis Dollars Obtain 501(c)(4) Tax Exemption
SELC recently worked with a community currency, Davis Dollars, in obtaining recognition of tax exemption as a social welfare organization under 501(c)(4). Click here for information about how we described the project to the IRS. Increasingly, the IRS has been denying recognition of 501(c)(3) tax exemption to currency groups and time banks, since the IRS is sceptical that the projects serve primarily to advance charitable or educational purposes. As a result, SELC has identified 501(c)(4) tax exemption as a viable alternative for many currency organizations, particularly those which do not focus specifically on underserved communities, but which do aim to provide a broad social benefit to a community. Organizations that receive exemption under 501(c)(4) are still exempt from paying taxes on income, but they are not able to receive donations that are tax deductible to the donors. This is a disadvantage for currency organization that rely on grants. However, for currency organizations that operate primarily on sources of earned income (such as through the sale of the currency itself), 501(c)(4) status is a viable path.
From Ownership to Stewardship: Strategies for Democratizing Urban Land Use: Wednesday, July 2nd, 6:00 PM at LOL Makerspace, Oakland, CA
Resilient Communities Legal Cafe: Three times per month in Oakland and Berkeley! Find dates, locations, and teach-ins here. That's right! We're still providing direct legal advice for those creating more just and resilient communities.
SELC's Community Currencies Team (Yassi, Chris, and Janelle)