Geithner Urged by Congress for Bank Rules on MMJ

Bloomberg — U.S. Representative Barney Frank is among 15 members of Congress pushing the Treasury Department to set rules that would help banks provide financial services to medical marijuana dispensaries.

“Legitimate state-legal businesses are being denied access to banking services, which does not serve the public interest,” the lawmakers said in a May 20 letter to Treasury Secretary Timothy F. Geithner that was distributed today by Americans for Safe Access, a patient-advocacy group.

The letter was written by Representative Jared Polis, a Colorado Democrat whose state is one of at least 14 that have legalized marijuana for medical use. It asks the Treasury to issue “formal written guidance” assuring banks they won’t be targeted for doing businesses with companies that distribute medical marijuana.

Wells Fargo & Co. and Bank of America Corp. are among U.S. lenders that have stopped opening new accounts for companies that provide medical marijuana because cannabis consumption and distribution are illegal under federal law. Treasury spokesman Andrew Williams didn’t have an immediate comment.

“If states want to make it legal or not, it should be a state matter,” Frank said in a telephone interview today. “It’s wrong for the banks to be told by Treasury they can’t service them the way they would service any other business.”

‘No Choice’

Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, signed the letter with 12 Democrats and two Republicans, including Representatives Ron Paul of Texas and Dana Rohrabacher of California, where voters in November will decide whether to legalize marijuana for recreational use.

Democrats signing the letter include Sam Farr, Pete Stark, Lois Capps, Brad Sherman, Linda Sanchez and Zoe Lofgren, all of California; Steven Cohen of Tennessee; Jose Serrano of New York; Raul Grijalva of Arizona; Donald Payne of New Jersey; and Tammy Baldwin of Wisconsin.

“We really have no choice as long as it’s illegal, especially illegal and unlawful activity as far as money- laundering is concerned,” Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, said in an interview last month. “We’re not making a moral decision here. We’re really basing it on the law.”

Source: Bloomberg.com (USA)
Author: Peter Eichenbaum
Published: May 24, 2010
Copyright: 2010 Bloomberg L.P.
Contact: peichenbaum@bloomberg.net
Website: http://www.bloomberg.com/