Feds Offer Banking Rules For Legal Pot Industry

By Bob Young
The Seattle Times

In what some hailed as a historic step for legal marijuana, the federal government announced Friday new rules aimed at encouraging banking services for pot businesses in Washington and Colorado.

But because marijuana remains a dangerous illegal drug under federal law, some banks — particularly large ones — may still opt not to provide checking accounts, credit cards and other services to legal pot merchants.

“My general reaction is this is an important step, albeit a first step,” said Denny Eliason, lobbyist for the Washington Bankers Association.

Marijuana advocates, who want to move the legal industry out of its risky, cash-only operations, were more enthused.

Taylor West, deputy director of the National Cannabis Industry Association, called the news “a sweet valentine” for the industry.

While the so-called federal guidance provides a pathway for banks to serve legal pot merchants without being prosecuted, there was agreement among regulators, bankers, lawmakers and pot entrepreneurs that some banks would remain uncomfortable with the federal prohibition of marijuana, or with marijuana itself.

“Those that operate in all 50 states have to deal with different laws and views, so they may have other stakeholder issues,” said Scott Jarvis, director of the state’s Department of Financial Institutions, which oversees the banking industry.

National banks could lose customers in more conservative states by taking on marijuana business. Smaller banks chartered in Washington and Colorado only have to worry about their reputations in those states, Jarvis said.

But even small, local banks could be cowed by the federal guidance handed down by the Justice and Treasury departments.

Federal authorities were clear that banks could be prosecuted if they do business with pot merchants who don’t adhere to eight federal priorities laid out in August by the Department of Justice (DOJ).

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