News
House Bill Would Loosen Banks’ SAR Obligations for Licensed Marijuana Dispensaries
By Colby Adams
printLegislation introduced Wednesday to facilitate access of state-licensed marijuana vendors to banking services would strike down some federal reporting obligations placed on U.S. financial institutions. The Small Business Banking Improvement Act, sponsored by Reps. Jared Polis (D-CO), Barney Frank (D-MA), Pete Stark (D-CA) and Ron Paul (R-TX), is designed to block federal investigations into medical marijuana dispensaries initiated by filings of suspicious activity reports (SARs) by financial institutions. If passed, the proposal would exempt banks from submitting SARs based solely on the fact that the transactions likely involve profits from the sale of medical marijuana in states that have legalized...
TO READ THE FULL STORY
Subscribe
Learn More
Related News
This time last December, one might reasonably have expected that 2014 would be a year of modest changes for the anti-money laundering and sanctions compliance sector. Then came JPMorgan Chase, BNP Paribas and a convoy of Russian tanks to quash that notion.
A little-noticed amendment to a U.S. appropriations bill could do what lawmakers and lobbying groups alike have failed to do: ensure that banks don't pay for taking on state-licensed cannabis companies.
The nation's financial intelligence unit will weigh whether additional guidance is needed on how banks should treat clients tangentially or directly associated with state-sanctioned marijuana dispensaries, according to sources.
Drug interdictions, illicit money seizures and suspicious bank wires related to Colorado are all on the rise since the state legalized the recreational use of marijuana, according to U.S. officials.
As federal and state officials continue down the road toward relaxing cannabis restrictions, banks have questions beyond simply whether they can accept marijuana dispensaries as clients. They wonder whether less direct financial ties to the businesses could be cause for concern too.
Banks can choose whether to keep accounts for certain marijuana dispensaries and report limited information to federal officials when the businesses are unlikely targets of prosecutors, the U.S. Treasury Department said Friday.
A number of marijuana dispensaries are attempting to convert their profits into securities and other investments to hedge against the threat of having their bank accounts frozen and subjected to federal asset forfeiture proceedings, say sources.
Tasked to consider whether it can offer regulatory relief to the medical marijuana industry, the U.S. Treasury Department may have few options to persuade reluctant financial institutions to bank state-approved dispensaries.
Banks that maintain accounts for state-licensed medical marijuana dispensaries will not be the targets of federal prosecutions, the head of the U.S. Department of Justice said Thursday.