Despite Feds Approval, Some Banks Still Wary of Marijuana Business
When it comes to doing business with marijuana sellers, it’s going to take a lot more than a thumbs-up from Eric Holder to get paranoid bankers on board.
The U.S. attorney general made waves last week when he said the Obama administration plans to give banks the go-ahead to make loans or open accounts for marijuana dispensaries in states where they’re legal without running afoul of federal laws, which still consider cannabis an illegal substance.
While the reassurance from Holder is nice, bankers say it’s not that simple.
Financial firms must comply with a slew of anti-money-laundering rules enforced by bank regulators, and the risk of violations could be big for banks that choose to do business with companies that are breaking federal laws.
Also, the DOJ directive wouldn’t be binding, and there have been past examples of prosecutors who disagree with similar guidance ignoring the directive. The next administration could also wipe it off the books. All it takes is one U.S. attorney to file criminal charges, and a bank could lose its charter and be forced to shut down.
With this in mind, for many banks — even with assurances from Justice as well as Treasury’s anti-money-laundering division — the risks still outweigh the rewards.
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