FinCEN: Marijuana Guidance is Working; More Than 100 FIs Serving Pot Industry

The Financial Crimes Enforcement Network reported Tuesday that more than 100 banks and credit unions are serving the legal pot business, an indication that guidance issued to the financial industry is “having the intended effect.”

The information was revealed in an address by FinCEN Director Jennifer Shasky Calvery. Speaking at the 2014 Mid-Atlantic AML Conference, Calvery said that “there are currently 105 individual financial institutions from states in more than one third of the county engaged in banking relationships with marijuana-related businesses.”

While the production, sale and consumption of recreational marijuana is legal under certain conditions in Washington and Colorado, financial institutions have shied away from banking the businesses, due to conflicts with federal law and extra layers of regulatory red tape. At least 20 other states have legalized some marijuana business, including Oregon, which allows medical marijuana.

Without banking services, the marijuana businesses are conducting cash transactions, prompting concerns about criminal dangers. Despite the fact that Washington’s retail industry opened for business this summer, just a handful of credit unions are known to have opened accounts or to be in the process of doing so.

However, Calvery said that FinCEN’s February guidance “is facilitating access to financial services, while ensuring that this activity is transparent and the funds are going into regulated financial institutions responsible for implementing appropriate AML safeguards.”

Federal guidance was issued in February to give banks and credit unions direction on how to serve legal pot businesses. The Washington State Department of Financial Services (DFI) followed up with a public forum to address the financial institutions’ concerns, and the NCUA recently instructed its examiners to follow the guidance.

Questions about this story? Contact James Pearson: 206.340.4790, jpearson@nwcua.org.

Posted in Federal.