WASHINGTON (4/5/16)--Senators from Oregon, Colorado and Washington asked federal regulators, including the National Credit Union Administration, to collaborate on joint guidance for how financial institutions can serve legal marijuana businesses.
Recreational marijuana is legal in those three states, as well as in Alaska and the District of Columbia, but remains illegal under federal law, which presents a dilemma for any financial institution considering servicing these accounts.
Sens. Jeff Merkley (D-Ore.), Patty Murray (D-Wash.), Michael Bennet (D-Colo.) and Ron Wyden (D-Ore.) asked the regulators to collaborate with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) to issue a joint guidance governing how financial institutions can serve marijuana-related businesses.
“Without a joint guidance providing direction on how to operate from their prudential regulators, banks and credit unions will continue to lack the clarity they need to operate in this market,” the letter reads.
FinCEN issued guidance in February 2014 outlining how financial institutions can provide services to legal marijuana-based businesses. The guidance outlines law enforcement priorities (such as preventing distribution of marijuana to minors and preventing marijuana funds from being used to cover up illicit drug business), and clarifies how financial institutions can stay within their Bank Secrecy Act requirements while serving these businesses.
Credit unions and banks providing services to marijuana businesses are required to file suspicious activity reports (SARs) to FinCEN, and while the total number of institutions serving these businesses has not been reported, FinCEN has confirmed that SARs are being filed.
“While the marijuana SARs reports are an option, most banks and credit unions have been reluctant to provide financial services to marijuana-related businesses due to their concerns their CAMELS supervisory rating will be penalized from examiners,” the letter reads. “However, with clearer guidance offered by all of their regulators, financial institutions will be more likely to serve these legal businesses and allow them to access our banking system without fearing repercussion.”