WASHINGTON—As the Trump administration considers removing Financial Crimes Enforcement Network (FinCEN) guidance that has allowed financial institutions to open accounts for marijuana businesses without running afoul of federal regulators, Treasury Secretary Steven Mnuchin offered some insights into how the Treasury Department may respond to the growing area of marijuana banking.
In a speech before the House Financial Services Committee, Mnuchin confirmed that he does not want to go back to the days where legal marijuana businesses were having to carry around “bags of cash” to pay their employees, The Financial Regulatory Report reported. Mnuchin noted with respect to the continued validity of the 2014 FinCEN guidance: “We are reviewing it, but the intent is not to take it down without a replacement that can deal with the current situation. We want to make sure that we can collect our necessary taxes and other things.”
“Secretary Mnuchin’s remarks strongly suggest that the 2014 FinCEN guidance is still effective, and that the Treasury Department is working diligently to craft a new replacement policy that will provide greater clarity for the industry,” the Financial Regulatory Report stated.
As CUToday.info reported, in January U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that has generally cleared the way for states to implement their own cannabis laws without Justice Department interference. And recently the federal government stated it may move to make it harder for cannabis industry operators who comply with state laws to store their profits with FIs.
"We are reviewing the [Financial Crimes Enforcement Network banking] guidance in light of the Attorney General's announcement and are consulting with law enforcement," Drew Maloney, the U.S. Treasury Department's assistant secretary for legislative affairs, wrote in a letter to members of Congress.
The letter is a response to a bipartisan group of 31 House members that had written the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) last month asking the agency to continue the cannabis banking guidance. Fifteen senators separately sent a similar letter.
The FinCEN document, issued in 2014, laid out a process for how financial institutions can open accounts for marijuana businesses and avoid triggering federal enforcement actions.
“While Secretary Mnuchin’s comments do indeed provide some comfort for banks that they may continue to rely on the 2014 FinCEN guidance, there remain significant compliance obstacles that must be addressed. For example, banks need to determine whether they have the risk appetite to serve marijuana-related businesses, whether their Bank Secrecy Act/Anti-Money Laundering policies and procedures meet supervisory expectations for serving the marijuana industry, and whether they have the vetting mechanisms in place to conduct appropriate due diligence on prospective and current customers. Ensuring that these and other regulatory protocols are in place will enable banks to meet their regulatory obligations, while effectively serving this new customer base that has the potential of generating plenty of green,” the Financial Regulatory Report stated.