Pubdate: Sat, 15 Feb 2014 Source: San Jose Mercury News (CA) Copyright: 2014 Associated Press Contact: http://www.mercurynews.com/ Details: http://www.mapinc.org/media/390 Author: Pete Yost, Associated Press OFFICIALS GUIDE BANKS ON NEW POT BUSINESSES WASHINGTON (AP) - The Obama administration on Friday gave banks a road map for conducting transactions with legal marijuana sellers so these new businesses can stash away savings, make payroll and pay taxes like any other enterprise. It's not clear banks will get on board. Guidance issued by the Justice and Treasury departments is the latest step by the federal government toward enabling a legalized marijuana industry to operate in states that approve it. The intent is to make banks feel more comfortable working with marijuana businesses. Others have an interest, too, in a regulated financial pipeline for an industry that is just emerging from the underground. Marijuana businesses that can't use banks may have too much cash they can't safely put away, leaving them vulnerable to criminals. And governments that allow marijuana sales want a channel to receive taxes. But a leading fi nancial services trade group expressed misgivings and others, too, said the guidelines don't go far enough in protecting banks. "After a series of red lights, we expected this guidance to be a yellow one," said Don Childears, president and CEO of the Colorado Bankers Association. "This isn't close to that. At best, this amounts to ' serve these customers at your own risk' and it emphasizes all of the risks." Washington and Colorado in 2012 became the first states to approve recreational use of marijuana. Currently, processing money from marijuana sales puts federally insured banks at risk of drug racketeering charges, so they've refused to open accounts for such businesses. Friday's move was designed to let institutions serve the businesses while ensuring that they know their customers' legitimacy and remain obligated to report possible criminal activity, said the Treasury . The American Bankers Association said "guidance or regulation doesn't alter the underlying challenge for banks. As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions." - --- MAP posted-by: Jay Bergstrom