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A Massachusetts credit union is set to be the first financial institution in the state to serve its recently legalized recreational pot industry. GFA Federal Credit Union cited "safety issues" associated with unbanked marijuana businesses in their decision to offer services, which are set to begin Oct. 1.

Massachusetts legalized recreational marijuana July 1; it is one of nine states and Washington, D.C., to do so. Twenty-two other states have legalized medical marijuana. However, many financial institutions in states that have legalized recreational marijuana have been cautious about offering banking services out of legal concerns.

In January, U.S. Attorney General Jeff Sessions rescinded directives that had instructed federal prosecutors to ease marijuana enforcement in states that have legalized the substance. That decision in turn muddied guidance issued by the Financial Crimes Enforcement Network (FinCEN) to clarify Bank Secrecy Act (BSA) expectations for financial institutions providing services to marijuana-related businesses.

In Colorado, Fourth Corner Credit Union is attempting to serve individuals and companies that support the legalized marijuana industry, such as accountants, lawyers and landlords, but not state-licensed dispensaries directly. A federal court has directed the credit union to reapply for share insurance coverage with the NCUA.

NAFCU has resources available on its Compliance Blog and has explored the issue in its monthly Compliance Monitor newsletter and bimonthly magazine to help credit unions understand the compliance risk of serving marijuana businesses. The association is also monitoring legislation in Congress that could provide clarity on the issue.