Feds seek to legalize marijuana industry banking

WASHINGTON (AP) — The Justice Department and federal banking regulators will help clear the way for financial institutions to transact business with the legitimate marijuana industry without fear of prosecution, Deputy Attorney General James Cole told Congress on Tuesday.

The issue has taken on greater urgency now that Colorado and Washington have become the first states to legalize recreational use of marijuana.

Currently, processing money from marijuana sales puts federally insured banks at risk of drug racketeering charges.

Because of the threat of criminal prosecution, financial institutions often refuse to let marijuana-related businesses open accounts. The problem occurs in states that have laws permitting medical use of marijuana. In 1996, California voters made their state the first to allow medical use, and 19 more states and the District of Columbia have enacted similar laws.

In an appearance before the Senate Judiciary Committee, Cole said the absence of banking services is one that “we need to deal with” and that “we’re working on it.”

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