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CUs may want to give marijuana businesses a pass
WASHINGTON (2/18/14)--New federal guidelines allow credit unions and others to provide financial services to marijuana dispensaries. However, this newfound leniency does not come without compliance burdens, the Credit Union National Association says in a new CompBlog post.

Colorado and Washington recently approved the legal sale of the drug from state-regulated dispensaries. The U.S. Treasury, Financial Crimes Enforcement Network and U.S. Deputy Attorney General James Cole have all commented on the issues in recent weeks, telling financial institutions that they may accept accounts from legal dispensaries.

However, CUNA said, "until Congress changes the federal law so that marijuana-related businesses are no longer illegal at the federal level, credit unions may be taking a great risk providing financial services to these businesses."

The compliance burdens could also be stifling for those that decide to take on dispensary accounts.

Financial institutions that work with these businesses should be aware of three new types of suspicious activity reports ("Marijuana Limited" SAR, "Marijuana Priority" SAR and "Marijuana Termination" SAR), as well as seven specific customer due diligence requirements, such as verifying with the state whether the business is duly licensed and registered.

Further, credit unions that work with dispensaries may need to determine whether or not marijuana from a given dispensary is:
  • Being used by a minor;
  • Being used by an individual who will get behind the wheel of a car; or
  • Being transferred across state lines.
"Not only does this compliance burden appear insurmountable, but also overreaching," CUNA said.

For more on the potential compliance and legal risks credit unions could face, use the resource link.
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