Monday, October 27, 2014
And While We're Talking About Marijuana and Financial Institutions . . .
. . . JULIE ANDERSEN HILL (Alabama Law) has a new article making a similar point (although she knows more about bank regulations than I do) in a new article, Why won't banks dance with Mary Jane? You should read the whole thing, but there are, to cut to the chase, three reasons (I've excerpted these paragraphs from the piece:
Anti-money laundering laws impose a high compliance burden on banks. Banks must report suspicious transactions involving more than $5,000 to the federal Financial Crimes Enforcement Network (FinCEN). FinCEN says virtually every transaction involving marijuana money is suspicious. . . . Mistakes can lead to criminal charges or fines. Some banks are unwilling to undertake this compliance burden and the risk that comes with it.
Banks in the United States cannot operate without deposit insurance. The FDIC warns that banks “need to assure themselves that they are not facilitating [their customers’] … illegal activity.” If a bank ignores the warnings, the corporation may revoke deposit insurance and force closure of the bank.
Banks that help the marijuana industry could be found guilty of “aiding and abetting” marijuana manufacturing or “conspiring” to dispense marijuana. It is also a crime to launder money – to engage in transactions knowing that the money came from marijuana.
Or, to put it more succinctly, you can (1) go through a lot of paperwork so that you can (2) risk having your bank fail, and maybe even (3) go to jail.
https://lawprofessors.typepad.com/cannabis_law/2014/10/and-while-were-talking-about-marijuana-and-financial-institutions-.html