First Pot Penalty Violations
Missouri, Oklahoma, and Arkansas are just some examples of states that are now permitting marijuana related businesses. With many states seeing new laws passed allowing for some type of marijuana or cannabis sales, financial institutions must learn to adapt.
A small credit union in Michigan was penalized by Federal Regulators for not following the strict guidance established. The Financial Crimes Enforcement Network (FinCEN) issued guidance to banks and credit unions that outlined obligations when they elect to serve the cannabis industry. The guidance says financial institutions should verify where a marijuana business is licensed, get an understanding of the business’s normal activity, and conduct ongoing monitoring for suspicious activity.
The enforcement action underscores the importance of adhering to long-standing nationwide guidance on how to mitigate the risks associated with a drug that remains illegal under federal law. The credit union must stop opening new marijuana-related accounts, and file missing suspicious activity reports. The National Credit Union Administration is also requiring the institution to implement an automated transaction monitoring system by April 30.
Nationwide, approximately 680 banks and credit unions are actively banking marijuana-related businesses. However, not all of them may actually have programs for serving the cannabis industry and for complying with all federal guidelines. Is your institution prepared for cannabis related businesses? Do you have policies and programs in place? Let ABS help you prepare.