By David Lawder
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Thursday she would welcome legislation that would rectify the conflict between federal and state laws on the sale and use of marijuana that is preventing cannabis firms from accessing the banking system.
Asked at a U.S. House of Representatives Appropriations subcommittee hearing about the issue, which forces cannabis businesses to hold large amounts of cash, Yellen said: “I think it’s a real problem and it would be desirable to have legislation that alleviated this problem.”
Republican Representative David Joyce said he had raised the same issue with former Treasury Secretary Steven Mnuchin five years ago and little has changed since then.
Some 38 states have approved marijuana for medical use and 24 have approved its recreational use, but cannabis sales remain illegal at the national level.
Most banks, concerned about running afoul of anti-money laundering laws, have shunned the business, forcing cannabis companies to deal in cash, which creates security risks for employees and hampers financing.
Yellen also has previously said the issue is an impediment to collecting taxes from cannabis firms.
“I think we would potentially welcome legislation in this area that would clarify for banks what their responsibilities are,” Yellen said in response to Joyce’s question about her position.
“The fact that marijuana is outlawed by the federal government creates an impediment to (banks’) willingness to provide banking services, services to cannabis firms, and it creates all the problems that you’re familiar with,” she said.
Yellen did not specify provisions that she considered crucial for such legislation nor comment on a measure passed last year by the U.S. Senate Banking Committee that aims to expand the industry’s access to traditional banking services.
“I think legislation may be necessary to raise the comfort level that banks have in doing this business,” she said.
Democratic Representative Steny Hoyer said he would assist Yellen and Republican colleagues in passing such legislation because the current situation was putting businesses and employees at risk.
“I am neither a user nor a suggester of using. The fact of the matter is every state that voted on it has made it legal. Every state,” Hoyer said.
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