The Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) recently issued a Marijuana Banking Update, with data through March 31, 2017.   The number of banking institutions offering services to Marijuana Related Businesses continues to increase, but the overall number of banks providing such services remains low.  As of March 31, 2017, only 368 banks and other depository institutions in the U.S. offered services to Marijuana Related Businesses.

Copyright: jeremynathan / 123RF Stock Photo

During the period covered by the Update, banking institutions filed approximately 30,000 Suspicious Activity Reports (SARS) across the 3 required filing categories:  Marijuana Limited, Marijuana Priority, and Marijuana Termination.  The majority of the SARs filings – over 20,000 – fell into the Marijuana Limited category, while 2,007 SARS were filed in the Marijuana Priority category and 7,326 SARs were filed in the Marijuana Termination category.

FinCEN defines the three filing categories as follows:

Marijuana Limited: the financial institution’s due diligence indicates that the MRB does not raise any of the red flags as defined in the Cole Memo and is compliant with the appropriate state’s regulations regarding marijuana businesses. The financial institution is providing banking services to the MRB.

Marijuana Priority: the financial institution’s due diligence indicates that the MRB may raise one or more of the red flags as defined in the Cole Memo or may not be fully compliant with the appropriate state’s regulations regarding MRBs. The financial institution is providing banking services to the MRB while further investigation is being conducted.

Marijuana Termination: the financial institution decided to terminate its relationship with the MRB for one or more of the following reasons:

    • The financial institution’s due diligence indicates that the MRB raises one or more of the red flags as defined in the Cole Memo.
    • The MRB is not fully compliant with the appropriate state’s regulations.
    • The financial institution has decided not to have marijuana related customers for business reasons.