Nation & World News

Feds Clear Banks To Do Business With Budding Pot Industry

By Scott Neuman on February 14th, 2014

The federal government on Friday issued guidelines for banks seeking to do business with the legal marijuana industry, stopping short of a blanket immunity for them, but strongly indicating that prosecutions for such crimes as money laundering would be unlikely.

NPR’s Yuki Noguchi reports that the Department of Justice and Treasury Department on Friday sought to “clarify rules for banks trying to navigate the murky legal waters of the marijuana business. Murky, because pot is legal in a growing number of states, but remains illegal under federal law.”

“In the absence of specific federal guidance, most banks had kept marijuana businesses at arms’ length, denying them loans, checking or savings accounts. [That] meant, like the street-drug trade, many state-sanctioned pot-sellers were doing cash-only trade,” Yuki says.

The banks have feared that federal regulators and law enforcement authorities would punish them for doing business even with state-licensed operations.

The Denver Post reports:

“In a joint statement, the U.S. Department of Justice and the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, said the move gives ‘greater financial transparency’ to an industry that remains illegal in nearly every state.”

“It also makes clear that banks would be helping law enforcement with ‘information that is particularly valuable’ in filing regular reports that offer insights about how marijuana businesses work.”

‘”Law enforcement will now have greater insight into marijuana business activity generally,” FinCEN said in a news release, ‘and will be able to focus on activity that presents high-priority concerns.’”

Taylor West, deputy director of the National Cannabis Industry Association, calls the rules change a victory for her group’s members.

“They’ve had to do things like payroll entirely in cash,” West tells NPR. “It creates huge security issues for the businesses, for their employees, and then it also makes it more difficult for them to handle the transparent accounting, which the industry is trying to put in as the standard.”

West says: “We don’t expect every bank in the country to sign on, but we think there are a lot of banks that see that this is an industry that’s projected to be worth two and a half billion dollars in 2014.”

Update at 4:20 p.m. ET:

Gabriel Spitzer of member station KPLU in Seattle reports that one of Washington state’s most vocal advocates for reform of banking regulations related to the industry, is happy with the rules change.

“It’s a giant step forward in the effort by Washington State to stand up a well-regulated marijuana market,” says Democrat Rep. Denny Heck.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

This entry was posted in News from NPR. Bookmark the permalink.

Comments are closed.

 

More Stories in News from NPR

The second atomic bomb test at Bikini Atoll on July 25, 1946. The Marshall Islands, where Bikini is located, is suing the U.S. for what it calls a violation of the Nuclear Non-Proliferation Treaty.

Pacific Island Nation Sues U.S., Others For Violating Nuclear Treaty

The Marshall Islands, the site of 66 U.S. nuclear weapons tests between 1946 and 1958, says the Non-Proliferation Treaty requires nuclear states to disarm.


Former Supreme Court Associate Justice John Paul Stevens likens making pot illegal to Prohibition. In his new book, Six Amendments, he proposes constitutional changes including a curb on an individual's right to bear arms.

Retired Justice John Paul Stevens: Marijuana Should Be Legal

In an interview with NPR’s Scott Simon, Stevens compares making pot illegal to the attempt to prohibit alcohol. Like alcohol, he said, there will soon be a consensus that it is not worth the cost.


Pope Francis as he celebrated communion last July in Brazil.

Pope OKs Communion For The Divorced? Not So Fast, Vatican Says

Word about what the pope reportedly said when he called a woman in Argentina set off speculation that he wants to reverse church teachings. His spokesman says that’s reading too much into the story.


U.S. journalist Simon Ostrovsky in Moscow in 2004. He was reportedly released on Thursday after being held briefly by pro-Russian separatists in eastern Ukraine.

American Journalist Freed By Kidnappers In Eastern Ukraine

Simon Ostrovsky, a reporter for Vice News, was seized at gunpoint by masked men in the city of Slovyansk earlier this week. Vice says he is now safe and in good health.


The steamship "City of Chester" in a photograph from the San Francisco Maritime National Historic Park.

Long-Lost Wreck Off San Francisco Recalls Anti-Chinese History

The City of Chester, which sank in 1888 after colliding with the liner Oceanic, has been found. At the time, false reports that the other ship’s Chinese crew failed to assist stoked racial hatred.


Thank you for your support

WUFT depends on the support of our community — people like you — to help us continue to provide quality programming to North Central Florida.
Become a Sustainer
I want to support FM 89.1/NPR
I want to support Florida's 5/PBS
Donate a Vehicle
Underwriting Payments