In the wake of the shift in federal marijuana enforcement policy, financial institutions have been left to speculate the risk in offering financial services to marijuana-related businesses. While the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued guidance in 2014 that laid out a process for financial institutions to open accounts for marijuana-related businesses, that guidance was premised on the enforcement priorities of the Cole Memo. After last month’s rescission of the Cole Memo, financial institutions have been patiently waiting for any guidance from FinCEN as to how to proceed with providing financial services to marijuana and marijuana-related businesses. And after weeks of waiting, stakeholders are finally receiving confirmation that the FinCEN guidance remains in effect—for now.
In the wake of the Cole Memo rescission, members of Congress have been advocating for FinCEN's guidance to remain in place. A bipartisan group of 31 members of the House of Representatives jointly sent a letter to FinCEN encouraging the agency to continue following the 2014 guidance. The House members stated in the letter that "FinCEN’s stated priorities have allowed [marijuana] businesses to conduct commerce more safely through financial institutions which reduces the use of all cash, improves public safety, and reduces fraud," and warned FinCEN that rescinding its guidance would "inject uncertainty into the financial markets."
A bipartisan group of 15 Senators sent their own letter to FinCEN the following day. The letter echoed the same sentiments, and noted the danger in disrupting the legal marijuana market and creating barriers to the banking sector. The Senators cautioned that by not protecting financial institutions from federal enforcement of marijuana laws, marijuana-related businesses will "face serious challenges paying their employees, conducting transactions with vendors, and meeting state tax obligations.”
The U.S. Treasury finally responded on February 1. The Treasury Department’s response stated that the Department is reviewing the FinCEN guidance in consultation with law enforcement, and the guidance remains in effect in the meantime. This letter comes on the heels of testimony by Sigal Mandelker, the Treasury Department’s deputy secretary, to the Senate stating that the banking guidance remains in effect until FinCEN’s review is over.
Many speculate that because the Cole Memo is no longer the enforcement standard followed by the Department of Justice, and because the FinCEN guidance is premised on the Cole Memo, review of the guidance will lead to its rescission. Interestingly, bills to provide more permanent clarity to the banking industry about working with marijuana businesses have been introduced by bipartisan groups in both the House and Senate. Stay tuned for further updates regarding the status of the FinCEN guidance.