WASHINGTON (6/18/14)--Heads of the four financial regulatory institutions have responded to Rep. Ed Perlmutter's (D-Colo.) request for more information regarding regulation of marijuana-based businesses in the state. Perlmutter and 15 other representatives wrote a letter to Federal Reserve Chair Janet Yellen in March asking for clarification on regulations for financial institutions involved with marijuana businesses.
The congressional letter was in response to guidance issues jointly by the U.S. Department of Justice (DOJ) and the Treasury Department's Financial Crimes Enforcement Network (FinCEN) in February that created a framework to enable regulated marijuana businesses in the 20 states and District of Columbia that have legalized certain marijuana activity to access financial services.
The letter explicitly requested implementation of the DOJ and FinCEN guidance by on-site examiners, ensuring financial institutions have "confidence that they can provide banking services to legitimate marijuana businesses without threat that their regulators will penalize them, threaten their deposit insurance, increase their capital requirements or force them to close accounts or stop providing services."
The response letter, dated signed by National Credit Union Administration Chair Debbie Matz, Federal Deposit Insurance Corporation Chair Martin Gruenberg, Comptroller of the Currency Thomas Curry and Yellen, emphasizes the importance of regulators both ensuring the "safety and soundness" of the United States banking system while insuring public access to that system.
"The agencies will work to ensure that banks and credit unions appropriately meet the expectations and responsibilities FinCEN has identified for depository institutions offering services to marijuana-based businesses, and, through the examination process, will evaluate the effectiveness of the banks and credit unions in evaluating and managing risks associated with providing these services," the letter reads.
In addition, the regulatory agencies are in the process of reviewing the latest guidance from FinCEN and the DOJ for inclusion in the Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual, while incorporating the new guidance into all supervisory processes.
The letter goes on to stay that, as previously stated by the regulators, the decision to open, close or decline a particular account or relationship is made by a depository institution without involvement by its supervisor.
"This decision may be based on the depository institution's particular business objectives, its evaluation of the risks associated with offering particular products or services and its capacity and systems to effectively manage those risks," it reads.