Feds Give Banks the Green Light to Serve Legal Marijuana Businesses
While Texas has not yet legalized medical marijuana, many of the banks operating in Texas also have branches and ATMs in states which do allow marijuana use for medical or recreational purposes. Until recently, banks were stuck between a rock and a hard place when it came to providing banking services to legal marijuana businesses in those states.
Marijuana is still a controlled substance under federal law
The problem was that under federal law, marijuana is still a controlled substance classified among arguably more dangerous drugs, such as heroin. The myriad of federal banking regulations designed to minimize money laundering by drug dealers left banks hamstrung in states where marijuana production and sales are legal under state law. Last week, the U.S. Justice Department issued a memorandum to federal prosecutors limiting “enforcement priorities,” essentially instructing federal prosecutors to ignore marijuana crimes which violate federal law but do not violate current state laws, with a few exceptions.
Compliance with anti-money laundering laws
Though the memorandum does not expressly give legal authorization to banks, the Treasury Department's Financial Crimes Enforcement Network's (FinCEN) Director Jennifer Shasky Calvery reportedly said the memorandum was meant to signal a green light for banks who provide financial services to state-licensed marijuana businesses — while still complying with federal anti-money laundering laws. A few Texas banks affected by the new rules include American Bank of Commerce (ABC Bank), Armed Forces Bank, BBVA Compass, Chase Bank, U.S. Trust Bank and Wells Fargo Bank, which all have branches or ATMs in states where marijuana is legal to some extent. For more information about keeping your business in compliance and other legal matters, contact an experienced Bryan-College Station, Texas business law attorney. We answer your business management questions, whether you are starting your first business, managing growing pains or developing an exit strategy. Call the Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.