House Members Urge FinCEN to Keep Pot Policy Despite AG Threat
Two House members are calling on the Financial Crimes Enforcement Network to keep its policy allowing financial institutions to deal with marijuana-related businesses even though the Justice Department may once again target such businesses for prosecution.
“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 two lawmakers, Rep. Denny Heck (D-Wash.) and Ed Perlmutter (D-Colo.), said in the letter.
The two House members currently are circulating the letter for signatures before sending it to FinCEN Acting Director Jamal El-Hindi.
Attorney General Jeff Sessions last week announced he was rescinding two Obama Administration memos that eased the prosecution of marijuana-related businesses in states that legalized the substance.
The Heck-Perlmutter letter is just one of several moves by lawmakers upset by the new policy. Sen Cory Gardner (R-Colo.) has gone so far as to threaten a hold on confirmation of Justice Department nominees based on the new policy.
After the Obama Justice Department released its memo, FinCEN adopted its own expectations for financial institutions dealing with marijuana-related businesses
“In general, the decision to open, close, or refuse any particular account or relationship should be made by each financial institution based on a number of factors specific to that institution,” the 2014 policy stated. “These factors may include its particular business objectives, an evaluation of the risks associated with offering a particular product or service, and its capacity to manage those risks effectively. Thorough customer due diligence is a critical aspect of making this assessment.”
Credit union and their trade groups have said that the decision to potentially crack down on marijuana-related businesses creates confusion for credit unions in states where it is legal.
An NCUA spokesman said the agency is reviewing the Sessions memo.
"In the meantime, NCUA expects credit unions, as it has all along, to evaluate risk and have appropriate measures in place to mitigate that risk,” he said, adding that the agency examines credit unions for compliance with compliance with Bank Secrecy Act and anti-money laundering rules.
Heck and Perlmutter asked FinCEN to make no changes to its guidance.
“We urge FinCEN to preserve this guidance to continue to support banking infrastructure and access to financial institutions for businesses that are operating in accordance with state and local law and abiding by eight other stated factors in your guidance,” they say in the letter.
They said that rescinding the guidance would inject uncertainty in the financial markets, adding that “attempts to disrupt this market are dangerous and imprudent.”