Thursday, May 27, 2010

Push to protect banks on legal pot businesses


Fifteen U.S. representatives, including seven from California, are urging the Treasury Department to say it won't "target or pursue" national banks that do business with medical marijuana distributors operating legally under state laws.

In a letter to Treasury Secretary Timothy Geithner, the lawmakers said, "dispensary operators are finding it increasingly difficult to maintain accounts with financial institutions."

That may be true of national banks, but many state-chartered banks are happy to do business with medical marijuana dispensaries, as long as they are operating legally.

Medical marijuana is legal in 14 states, including California, and many more states - out of compassion or the need for new tax revenues - are considering legalizing it. California voters will decide in November whether to make it legal for recreational use as well.

But growing and distributing marijuana is still illegal under federal law and for that reason, many national banks won't do business with medical marijuana distributors. Bank of America, Chase and U.S. Bank all confirmed that they won't do business with medical marijuana distributors, even in states where it is legal.

Wells Fargo said it stopped opening new accounts with medical marijuana dispensaries this month and is reviewing its existing accounts with them. "In general, we follow federal, not state, law," says Wells spokesman Chris Hammond. "The decision was made to have a consistent standard."

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