Pot Industry’s Bank Bid Rejected By Federal Regulators

COLORADO:  The Fourth Corner Credit Union is not allowed to accept any marijuana business until they get federally insured.

And this is the more reason the credit union is asking for equal access to the financial system so that marijuana businesses could operate without restrictions, because they are now at a disadvantage.

According to the Denver Post, the Fed’s rejection is the latest denial in a string of roadblocks which included the National Credit Union Administration’s denial of Fourth Corner’s application for deposit insurance. Some 400 financial institutions have filed thousands of marijuana-related reports with federal banking regulators in compliance with last year’s guidance. Therefore, the story said, federal concessions to requests like the one from Fourth Corner are few and far between.

As Colorado legalized marijuana for recreational and medical use, the substance remains illegal at the federal level.

More Than 100 Banks, Credit Unions Serving Pot Businesses: Feds

DISTRICT OF COLUMBIA: There are 105 U.S. financial institutions providing banking services to marijuana dispensaries and other pot businesses, a top federal official is expected to reveal in a speech Tuesday.

The speech provides the most detailed look yet at the impact of marijuana guidance the Financial Crimes Enforcement Network issued to banks and credit unions in February, though it’s unlikely to resolve the lingering doubts that many banks still have.

Marijuana shops, which generate large amounts of cash and can be targets of thieves, have been lobbying for more access to the mainstream financial system. The guidelines were meant to encourage financial institutions to do business with the industry provided they met certain criteria, and Fincen Director Jennifer Shasky Calvery is expected to declare that the agency’s goal has been achieved.

“From our perspective the guidance is having the intended effect,” Shasky will say, according to a copy of her prepared remarks that Fincen provided to American Banker. “It is facilitating access to financial services, while ensuring that this activity is transparent and the funds are going into regulated financial institutions.”

However, the speech does not say whether the guidance has made banks and credit unions any less wary of the risks involved in working with an industry that, while legal in around 20 states, is still banned under federal law. Banks and credit unions may be especially wary of the pot business at a time when many in the financial industry believe that regulators have heightened expectations with regard to their compliance with the Bank Secrecy Act.

When Fincen released its guidance, it sought to walk a fine line between encouraging banks to take the plunge and warning of the consequences if they failed to comply with a detailed series of guidelines.

Shasky is expected to say Tuesday that the 105 banks and credit unions with connections to the pot business are located in states representing more than a third of the country. That compares with 87 financial institutions in Colorado alone that had relationships with marijuana dispensary businesses between June 2011 and September 2012, according to a Fincen report from last year.

The 105 institutions that are currently working with marijuana firms represent less than 1% of all banks and credit unions nationwide.

Payment Options For Legal Medical Or Recreational Marijuana

COLORADO:  Buyers of state-legal medical marijuana or recreational marijuana use now have non-cash payment options.

The payment options now include credit, debit, prepaid cards, mobile applications, and Bitcoin, with some even including rewards programs.

The legal Marijuana business has its own trade group, the National Cannabis Industry Association (NCIA). NCIA’s focus is to provide merchant solutions. Being accepted as a NCIA member delivers a sort of Seal of Approval to a payment vendor.

This new niche in payments was created on 14 February 2014 when the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued its guidence report. It specifies ways  financial institutions can provide services to Marijuana-related businesses.