WASHINGTON—The Trump administration is considering removing Financial Crimes Enforcement Network (FinCEN) guidance that has allowed financial institutions to open accounts for marijuana businesses without running afoul of federal regulators.
As CUToday.info reported, last month U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that has generally cleared the way for states to implement their own cannabis laws without Justice Department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.
Now, the federal government may move to make it harder for cannabis industry operators who comply with state laws to store their profits with FIs, Forbes reported.
"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, Forbes reported.
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.
“FinCEN’s stated priorities have allowed such businesses to conduct commerce more safely through financial institutions which reduces the use of all cash, improves public safety, and reduces fraud,” the House lawmakers wrote in their letter. “Leaving your guidance unchanged will continue to encourage small companies to make investments by freeing up access to capital. It will also further provide for well regulation and oversight through suspicious activity reports. Rescinding this guidance would inject uncertainty in the financial markets.”
In a previous CUToday.info report, Sundie Seefried, who heads $352-million Partner Colorado CU in Denver, which created a CUSO, Safe Harbor Private Banking, specifically for the cannabis industry, told CUToday.info that the decisions by the Justice Department won’t impact the credit union’s current plans to serve legal marijuana businesses in Colorado, as well as to work with credit unions across the country to establish pot banking programs.
Credit unions that serve the marijuana industry in states where cannabis is legal have been walking very fine lines between state laws that permit marijuana and federal law, which does not. With Sessions saying the Justice Department’s new position will be to allow federal prosecutors where marijuana is legal to decide how aggressively to enforce federal law, an already murky area has become murkier—and potentially more threatening—for those CUs and CUSOs serving the cannabis industry. The previous policy, established under the Obama Administration, generally barred federal law enforcement officials from interfering with marijuana sales in states where the drug is legal.
Seefried told CUToday.info that her credit union and the CU’s CUSO follow FinCEN guidance.
“The changes in guidance should and do concern us,” said Seefried about Session’s decision. “However, the Cole Memo was not written for financial institutions, the FinCEN guidelines are our guidance. Until we hear from FinCEN that they oppose banking the funds, we will continue.”