Oregon Legislative Update: NWCUA Testifies on ‘Marijuana and Banking’
March 2, 2015
March 2, 2015
Last Wednesday night at a hearing on the implementation of Measure 91—the new Oregon law on recreational use of marijuana—the Northwest Credit Union Association, along with Attorney Hal Scoggins of the firm Farliegh Wada Witt, and Alan Hanson, general counsel for Maps Credit Union, provided background to a legislative committee. The committee, Chaired by Senator Ginny Burdick and Representative Ann Lininger, asked both credit union representatives and bank representatives to discuss the federal barriers around working with marijuana businesses in Oregon.
Here are excerpts from part of our testimony:
“State laws legalizing medicinal marijuana use (and in Washington and Colorado, recreational marijuana use) and legalizing marijuana distribution for permitted purposes have left credit unions in a bind.
“Growers and distributors quickly formed new businesses to meet the newly legalized demand. Like any new business, these organizations need financial services in order to successfully operate. However, financial institutions have been unable to provide those services, due to Bank Secrecy Act (BSA) compliance and federal criminal concerns.
“Growing and distributing marijuana for permitted purposes is no longer a crime under the law of 20 states (and the District of Columbia). However, it remains a federal crime. The U.S. Justice Department’s (DOJ) assurances that it will not pursue criminal charges against marijuana-related businesses (MRBs) permitted by state law did not address the BSA concerns faced by credit unions serving those businesses. Credit unions must file suspicious activity reports when they are aware that a member is depositing funds derived from illegal activity into the member’s account. In addition, In addition, the DOJ’s non-enforcement stance provides no explicit protection for a credit union potentially aiding and abetting federal criminal activity.
“FinCEN attempts to address the BSA issues by laying out its expectations in three key aspects of serving MRBs:
- Due diligence in account opening for MRBs;
- A special regime of SAR filing requirements for MRBs; and
- Continuing due diligence requirements in serving MRBs.
“The guidance is aimed at harmonizing credit union BSA requirements with the enforcement priorities set out last August in a U.S. Department of Justice Memorandum from Deputy Attorney General Andrew Cole to U.S. Attorneys (the Cole Memo).”
SB582 Hearing Set for this Wednesday
A bill to update the Oregon Credit Union Act is scheduled for its first hearing on Wednesday, March 4. The bill makes four key changes including:
- Board Compensation – Allow Oregon credit unions the option to provide reasonable compensation to their directors.
- Membership – Amend state law to remove share account requirement on membership requirement.
- Membership – Remove ORS 723.188 which requires any credit union that serves state employees to include foster parents in its field of membership. Replace this requirement with a definitional change that would include foster parents and legally appointed guardians in the definition of relatives eligible for membership.
- Supervision & Regulation – Remove the requirement that the DCBS approve new branches.
Questions about this story? Contact James Pearson: 206.340.4790, firstname.lastname@example.org.