OCC's Otting wants marijuana banking resolved by 2020
Comptroller of the Currency and interim director of the Federal Housing Finance Agency Joseph Otting is calling on Congress to take action on marijuana legalization to provide financial institutions with more clarity on how they can serve marijuana-related businesses.
"Congress is going to have to act at the national level to legalize marijuana if they want those entities involved in that business to utilize the U.S. banking system," Otting said during a press roundtable this week.
Otting noted the compliance burden financial institutions today face when serving marijuana businesses and said he is hopeful Congress will act on the issue in 2019.
In January 2018, former Attorney General Jeff Sessions rescinded directives that had instructed federal prosecutors to ease marijuana enforcement in states that have legalized the substance.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.
However, President Donald Trump's nominee for attorney general, William Barr, said during his confirmation hearing earlier this week that he would not pursue marijuana businesses that relied on FinCEN's previously issued guidance. In addition, FinCEN Director Kenneth Blanco has also told financial institutions interested in serving marijuana-related businesses to follow those guidelines.
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 risks associated with serving marijuana businesses. The association is also monitoring legislation in Congress that could provide clarity on the issue.
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