Big U.S. Banks Seek New Clarity On Risks Of Marijuana-Linked Accounts

MISSOURI: Major banks are getting increasingly wary of some transactions with smaller banks that have begun to allow marijuana businesses to open accounts. Officials at the bigger institutions say they fear being in breach of anti-money laundering laws and are pressing federal authorities to make it clear what is legitimate and what is illegal.

The problem arises because in Colorado and Washington states, marijuana for general use is legal, and in a host of other states it is legal for certain medicinal purposes. But the business is still illegal under federal law, and U.S. banks are required to report transactions that they suspect involve money earned through illegal activities.

The bankers, including anti-money laundering officials at three of the biggest U.S. banks, expressed concern that their firms could face civil and even criminal penalties not only for dealing with any of the businesses directly but also handling money from the estimated dozens of small and mid-sized banks that have begun working with the marijuana shops or their suppliers.

The bankers say the U.S. Treasury Department’s anti-money laundering unit needs to clarify its expectations for the handling and reporting of wire transfers and other payments that involve people and entities linked to state-sanctioned marijuana businesses.