An issuance on Friday has confirmed that federal regulators are now allowing banks to provide services to businesses dealing with legal marijuana, said a Wall Street Journal report. According to the new guidance, banks would need to submit regular reports to the Treasury Department and report suspicious activity in compliance to servicing legal marijuana businesses.
Referring to the new law that would keep the proceeds of illegal activity out of the financial system in the US, a a senior official at the Treasury Department's Financial Crimes Enforcement Network said, "We quite clearly say that it is possible to provide financial services to state-regulated marijuana businesses and still be in compliance with Bank Secrecy Act obligations. We hope through this guidance that we're going to give more transparency of the marijuana business that is going on in this country and allow law enforcement to do their job."
The guidance was issued by the US Treasury and the Justice Department, which was aimed to address inquiries made by banks about the state and federal laws regarding marijuana. WSJ said that the new guidance will be help marijuana businesses navigate the laws on marijuana, which currently considered illegal under federal law, but legal in 20 states and the District of Columbia for certain purposes and Colorado and Washington states for recreational purposes.
Legal marijuana dealers had difficulty operating their businesses solely on cash, as businesses have difficulty applying for bank loans or open accounts to help them manage their businesses.
However, the guidance did not stave off concerns of majority of financial institutions. President Frank Keating of industry lobbying group American Bankers Association said, "While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn't alter the underlying challenge for banks. As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions."
