It seems the advent of the Trump Administration has yet to dissuade banks from serving state-legal marijuana businesses. According to a marijuana banking update issued by the Financial Crimes Enforcement Network, a growing number of financial institutions are banking marijuana money in the United States.
By the end of March 2017, 368 depository institutions were actively banking marijuana-related businesses in the United States, marking a 8.4% increase since the time of Donald Trump’s inauguration as the 45th president of the United States. Between February and March 2017, 34 additional financial institutions began banking marijuana money, signifying the largest monthly increase as recorded by FinCEN’s latest report.
According to FinCEN’s monthly totals for marijuana guidance reports, by the end of March 2017, there were approximately 1,600 distinct bank accounts associated with marijuana-related businesses in compliance with state regulations and not in violation of the Cole Memo.
FinCEN’s data is based upon Suspicious Activity Reports filed by financial institutions. SARs are required to be submitted to FinCEN when a bank logs a suspicious transaction of $5,000 or more that it believes is related to potential money laundering or terrorist financing. Each report contains the address, name, date of birth, Social Security number or passport information, and a description of the financial activity that aroused suspicion.
Using key phrases designated for marijuana-related businesses, FinCEN calculated that it had received a total of 28,651 SARs as of March 31, 2017. FinCEN uses three key phrases to categorize a financial institution’s relationship with a marijuana-related business: marijuana limited, designating a business that is compliant with state regulations and not in violation of the Colo Memo; marijuana priority, designating a business that may not be completely compliant with state regulations or may be in violation of one of the Cole Memo’s eight enforcement priorities, with the financial institution still providing banking services to the business while conducting an investigation into the matter; and marijuana termination, designating a business whose relationship has been terminated by the financial institution for violating more than one of the Cole Memo’s eight enforcement priorities, not being compliant with state regulations or because the financial institution has decided to stop banking marijuana money.
While FinCEN’s latest marijuana banking update does indicate that a growing number of financial institutions are serving state-legal marijuana businesses, many marijuana-related businesses have difficulties establishing and maintaining relationships with financial institutions.
According to the Pew Charitable Trusts, 40% of Colorado’s marijuana businesses did not have bank accounts in 2016.
While members of Congress recently introduced the SAFE Banking Act, to allow state-legal marijuana businesses to have access to banking services, the legislation has yet to move out of committee.
In the latest marijuana-related banking development, on June 7, 2017, the U.S. House Rules Committee rejected an amendment to the Financial CHOICE Act of 2017 that would have prohibited the U.S. Treasury Department from disciplining financial institutions that provide banking services to marijuana-related businesses, as reported by MassRoots.