The step was a cautious one, reflecting conflicting pressures on the administration.
On one side, many states now allow the sale of marijuana for medical or recreational use. Atty. Gen.
At the same time, federal law still classifies marijuana as illegal, and many in law enforcement agencies have privately criticized the administration's actions to rein in prosecutions.
The move drew praise from marijuana advocates but seemed likely to fall short of the reassurance banks have sought that they will be free from the risk of prosecution if they deal with marijuana-related transactions.
The effect on California's dispensaries is even more in doubt. The new guidelines say "a financial institution may reasonably rely on the accuracy of information provided by state licensing authorities." Although some California cities and counties regulate the stores, the state has passed no laws to control them.
That uncertainty could increase pressure on the state Legislature to regulate
Robert Jacob, executive director of the Peace in Medicine dispensary in Sebastopol, Calif., was still optimistic about the federal move.
"I think this is an important first step and a sign that the federal government agrees that responsible regulation is better than turning a blind eye," he said.
Jacob, who is also the city's mayor, said he had approached every bank in Sonoma County to open an account. Two banks agreed, but both later sent him notices saying they were going to have to shut down the accounts.
Steve DeAngelo, who deals with millions of dollars in cash as the head of Harborside Health Center in Oakland, one of the country's largest dispensaries, called it a "baby step." But, he added, "There is a great opportunity here for some forward-thinking, courageous bankers to step up and do the right thing."
The guidelines issued by the Justice and Treasury departments say that if banks follow new procedures and avoid marijuana businesses that raise red flags, such as selling to minors, prosecution "may not be appropriate."
Bankers and their advisors wondered how they could be expected to enter the legal limbo created by the new policy.
Frank Keating, president of the American Bankers Assn., said banks "appreciate the efforts" but noted they would not "alter the underlying challenge for banks."
"Possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions," he said.
Experts were skeptical.
"We believe the vast majority of banks — especially publicly traded banks — will avoid marijuana retailers despite the guidance," said Jaret Seiberg, a senior policy analyst with financial services firm Guggenheim Partners. "The risk of a violation, in our view, far outweighs any monetary benefit."
Two states, Colorado and Washington, voted more than a year ago to allow the sale of marijuana for recreational, as well as medical, use, and 18 states — including California, Illinois and Connecticut — and the District of Columbia allow it for some medical purposes.
The Justice Department indicated in August that it would not attempt to block the implementation of those laws as long as marijuana businesses did not sell across state lines or cross other red lines.
President Obama and Holder have indicated that they have no desire to be tough on pot. Obama said in a New Yorker article published in January that marijuana use is not more dangerous than alcohol.
But the step announced Friday reflects a reluctance to go too far because of solid opposition to marijuana legalization within law enforcement, including the Drug Enforcement Administration.
In January, after Obama's comments were published, DEA Administrator Michele Leonhart, in a private meeting with sheriffs, was highly critical of the president's views and of the trend toward legalization generally. According to the Boston Herald, Leonhart got a standing ovation when she criticized Obama's remarks, as well as other White House moves she said indicated a growing friendliness toward marijuana.
While the administration is under pressure from some lawmakers in both parties to go even further and declassify marijuana as one of the most dangerous illegal drugs, administration officials say further steps are unlikely until
Advocacy groups said the Obama administration had gone as far as could be expected to make financial transactions possible for marijuana businesses.
"It's another indication that the Obama administration seems to be acting in good faith when it comes to trying to give Colorado and Washington the ability to implement their laws in the best possible way," said Ethan Nadelmann, executive director of the Drug Policy Alliance. "It looks like they are trying to do as much as they can do, given the limits of federal law and the inability of Congress to do what it needs to do."
Banks that rely on the Justice Department's very limited legal assurances still face a gauntlet of guidelines from the department's Financial Crimes Enforcement Network, known as FinCEN, advising banks on how to avoid violating laws designed to prevent laundering of drug money.
"Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses," said Jennifer Shasky Calvery, the unit's director.
Banks and other financial institutions still must submit suspicious activity reports every time they handle marijuana-related money because the drug remains illegal under federal law, but they will be allowed to file a "marijuana limited" report, which indicates that the only reason for the filing is because the business involves marijuana.
The guidance does not provide a "safe harbor" that would guarantee a bank would not face civil charges, but banks would not face enforcement actions if they follow the guidelines, said a senior agency official.
The agency determined that some small- and medium-size banks would be willing to provide financial services to marijuana businesses in states where it is legal, the official said. "At the end of the day, that is a decision that each financial institution needs to make on its own," the official said.