U.S. Officials in Talks to Allow Banking for Pot BusinessPhil Mattingly
The U.S. Justice Department has entered talks with federal agencies and banking regulators to clear the way for marijuana dispensaries to obtain banking services, a top U.S. official said.
The meetings are “to discuss ways that this could be dealt with in accordance with the laws we have on the books today,” Deputy Attorney General James Cole told lawmakers on the Senate Judiciary Committee today.
The effort comes less than two weeks after the Justice Department announced it wouldn’t sue to block laws in Colorado and Washington that legalize recreational use of marijuana. Instead, the Obama administration chose to work with local officials to set up regulations and enforcement priorities.
Cole, in a memo sent Aug. 29 to U.S. attorneys around the country, set eight enforcement priorities, directing prosecutors to leave other marijuana-related issues to state and local law-enforcement authorities.
Cole’s memo didn’t specifically address the business implications of the revised guidelines. Stakeholders of all kinds have been pushing state and federal authorities to make clear what may run afoul of federal law.
For dispensaries in states where medical or recreational marijuana use is legal, access to banking services -- or the general lack thereof -- has been a hurdle to doing business.
“The banking industry is not willing to provide services to state-authorized dispensaries because they fear they may be violating federal money-laundering laws,” Senator Patrick Leahy, a Vermont Democrat and chairman of the panel, said.
Under federal law, marijuana is a controlled substance, requiring banks to report to federal authorities any related transactions as suspicious activity to Fincen, the Treasury Department agency that collects and maintains financial transaction data for law enforcement purposes.
“We agree that this is an issue we need to deal with,” Cole said.
A Justice Department official said at the time of the memo that specific guidance from the department was unlikely and banks and other companies should look to the enforcement priorities -- which include keep marijuana sales away from children, violent crime, trafficking operations and violence -- as a road map for what to avoid.
Federal prosecutors retain the discretion to bring charges against anyone involved with marijuana, which remains illegal on the federal level.