Senators Seek Guidance for Banks Serving Marijuana Businesses

As you are aware, the citizens of Oregon, Colorado, Washington, Alaska, and the District of Columbia recently legalized marijuana for recreational and medicinal purposes and nineteen states allow for medicinal marijuana. Ensuring marijuana-related businesses have access to financial services is critical not just for the safety of these communities but also to help spur economic growth.

The financial institutions providing banking services to legitimate marijuana-related businesses are required to file marijuana suspicious activity reports (SARs) with Treasury's Financial Crimes Enforcement Network or FinCEN. While the total number of banks and credit unions offering services has not been reported, FinCEN confirmed to Congress that firms are filing these reports.

However, many marijuana-related businesses are experiencing difficulty accessing financial services and must operate all-cash operations. Operating on an all- cash basis for these businesses makes it difficult for them to function, as well as for states to collect tax revenue. Forcing them to operate in all cash also creates a serious public safety risk for the businesses and the neighboring community.

While the marijuana SARs reports are an option, most banks and credit unions have been reluctant to provide financial services to marijuana-related businesses due to concerns their CAMELS supervisory rating will be penalized from examiners. However, with clearer guidance offered by all of their regulators, financial institutions will be more likely to serve these legal businesses and allow them to access our banking system without fearing repercussion.

We are writing today to ask you, all of the federal financial regulators, to collaborate with FinCEN on their February 14 memo and issue a joint guidance governing how financial institutions can effectively serve marijuana-related businesses. Without a joint guidance providing direction on how to operate from their prudential regulators, banks and credit unions will continue to lack the certainty they need to operate in this market.

We were pleased to learn that the federal banking agencies are indeed having discussions with FinCEN about how financial institutions can serve this market and we look forward to your prompt response to my request.