Page 8 - Michigan Credit Union League: 2018 Contact Q2
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REGULATORY CORNER
THE UNCERTAINTY OF WORKING
WITH MARIJUANA-RELATED
BUSINESSES
By Sarah Stevenson
Currently, 29 states and the District of Columbia (D.C.) 4. Implement appropriate procedures for staff opening
have legalized medical marijuana, while nine of those MRB accounts, including:
states and D.C. have also sanctioned recreational mari-
juana. An additional 17 states have legalized cannabidiol a. E nsuring proper licensing with the Michigan Depart-
(CBD). While certain states, including Michigan, continue to ment of Licensing and Regulatory Affairs (LARA)
expand laws relating to marijuana, it remains illegal under
the Controlled Substances Act, resulting in continued 5. Development of an enhanced monitoring account
uncertainty for lenders such as credit unions. program for MRBs
This uncertainty was heightened on Jan. 4 of this year a. Staffing resources — a staff solely dedicated to MRBs
when U.S. Attorney General Jeff Sessions issued a one-
page memo rescinding what is known as the Cole Memo. b. Utilize anti-money laundering software
The Cole Memo, in part, provided credit unions with a
degree of guidance for financial institutions that are c. H ave a third-party vendor assist with tracking
banking, or seeking to bank, with marijuana-related busi- MRB activity
nesses (MRBs), including how to navigate the conflict
between individual state laws and federal illegality. i. Seed to sale
It remains unclear whether the rollback of the Cole Memo ii. Know your customer
will mean a federal crackdown on marijuana enforcement
by federal prosecutors. States, such as Colorado, have d. Onsite inspections
signaled a “business as usual” approach while others
have indicated concern over the potential for federal i. Ongoing maintenance
prosecutorial action.
ii. D edicated staff assigned to specific MRBs
What Should Credit Unions Do If They Wish to Serve — constant communication with the business
the Marijuana Industry?
6. Evaluate and enhance physical branch security
The Financial Crimes Enforcement Network’s (FinCEN)
2014 Bank Secrecy Act (BSA) guidance, which remains a. Updated cameras that can see dollar bill denominations
in place, clarifies how financial institutions can provide
services to MRBs consistent with their BSA obligations. b. Additional vault cameras
If credit unions wish to bank with MRBs, they should use
this as a road map as well as the following framework: c. Security guard
1. Obtain appropriate legal counsel and have legal 7. R eview agreement with armored car service —
counsel present the plan to the board of directors need to confirm that the credit union’s armored car
service will transport cash from MRBs
2. Use a board-approved policy when addressing MRBs
8. Work very closely with credit union examiners
a. Which types of MRBs will be serviced and regulators
b. Update credit union risk assessments 9. T he credit union must have a firm exit strategy in
the event something occurs at the federal level,
3. Update credit union bylaws such as the U.S. Department of Treasury or Fin-
CEN indicating financial institutions are no longer
permitted to bank with MRBs or if the credit union’s
regulator requires the credit union to exit
To learn more about the relationship between credit
unions and MRBs, AC&E attendees can catch the follow-
ing sessions, from 12:30–4:15 p.m., June 8: “Cannabis
Banking: What’s the Big Deal?,” “Cannabis Banking:
Boots on the Ground Perspective” and “Marihuana Busi-
nesses: What Credit Unions Need to Know.”
8 SECOND QUARTER 2018 I CONTACT
