Treasury Defends Rules On Banks, Marijuana Sellers

Treasury Secretary Jack Lew on Tuesday defended the Obama administration’s guidelines to banks conducting transactions with legal marijuana sellers as congressional Republicans questioned whether the guidance amounts to tacit federal approval of a drug illegal in most states.

The Justice and Treasury departments issued a roadmap in February that would allow the new businesses to make payroll, save money and pay taxes, a move that enables the legalized marijuana industry to operate in Colorado and Washington state. In 2012, the two states became the first to approve recreational use of marijuana.

Rep. Hal Rogers, R-Ky., chairman of the House Appropriations Committee, challenged Lew at a hearing, questioning whether guidance to banks on doing business with legal marijuana sellers represents a “rubber-stamp” by the federal government for a predominantly illegal activity.

“Without any guidance, there would be a proliferation of cash-only businesses, and that would make it impossible to see when there are actions going on that violate both federal and state law and that … would be a real concern,” Lew told the House subcommittee on financial services. “We thought that the clarity, bringing it into daylight, was a better solution.”

Ideally, Lew said, Congress would write a law to establish a policy. In its absence, the administration issued the guidelines that banks must review state license applications for marijuana customers, request information about the business, develop an understanding of the types of products to be sold and monitor publicly available sources for any negative information about the business.

– Read the entire article at Yahoo! News.