The Future of Marijuana Banking
To determine what direction marijuana banking might take, and how the risk profile of that activity might change, it will be important to continue to monitor the actions of key players in this ecosystem.
The most obvious parties to watch are FinCEN and the DOJ. But their motivations—and the motivations of other federal law enforcement authorities and agencies—are not necessarily obvious. The federal government’s interests are not uniformly aligned against marijuana banking.
Despite the federal illegality of marijuana, the federal government actually faces potential harm from marijuana transactions being excluded from the mainstream banking system. Transactions conducted through banks and credit unions, and other financial institutions subject to the BSA, such as money services businesses (MSBs), are subject to BSA/AML provisions requiring the filing of SARs (whether marijuana-specific or not), Currency Transaction Reports (CTRs), and other forms. These reports provide a rich and constantly refreshed data set to FinCEN and the governmental entities — including the DOJ — that access these filings, and help them identify potential crimes to pursue. Already, many of these transactions are not reported or trackable because they are not moving through mainstream financial institutions. If even fewer financial institutions were to serve MRBs, that would result in even less of this data available to the government. (And the interests of state authorities in having banking access for MRBs seem even more clear: a cash-based industry brings the potential for violent crime and theft of that cash, and state regulators face the unwieldy process of accepting payments from their marijuana licensees in cash.) As a result, it is possible that federal agencies other than DOJ will join state governmental entities in calling for changes to the current situation—changes that likely must come from Congress.
Full Article / Source: www.lexology.com