My question is related to '90-day follow up SARs'. We do not bank marijuana businesses.

We do however, bank employees of these businesses (not the owners though). We would initially file a 'limited SAR' and watch the account for suspicious activity. If there is no suspicious activity during the 90-day period, would be be required to refile an updated "limited SAR"? I would say 'no' as the activity has not changed and no suspicious actity is occuring.

Thoughts?

A
financial institution should follow FinCEN’s existing guidance
on the timing of filing continuing activity reports
for the same activity initially reported on a “Marijuana Limited” SAR
.
6
The continuing activity report may contain the same limited content as the initial SAR,plus details about the amount of deposits, withdrawals, and transfers in the account since the last SAR. However, if, in the course of conducting customer due diligence(including
ongoingmonitoring for red flags), the financial institution detects changes in activity that potentially implicate one of the Cole Memopriorities or violate state law,the financial institution should file a “Marijuana Priority” SAR


http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2014-G001.pdf

If you file a SAR on a person just because his income is derived from a marijuana-related business, then you will continue filing as long as he works there.

It's the decision to file the first SAR on this line of thinking that is the big one. Did someone tell you it was necessary?

Thanks Ken I was tring to fix my post when your came around. I have Same question.

Is it necessary?

I don't know. I was just hoping to hear that someone claimed to know because I would have a number of related questions.

My post 1917490:

Excerpt from Colby Adams' interview with Tom Fleming (Former Assistant Director for the Office of Compliance at the Financial Crimes Enforcement Network and frequent Top Gun speaker.)

For a bank to cash a check for a dispensary employee is tricky, for example, because under federal law their salary is the proceeds of a crime. This problem conceivably affects everything that touches the business if they are renting space in a building held by multiple tenants, the dispensary is paying the building owner with what the federal government considers to be criminal profits. Does the building owner’s bank now have to determine to what extent his transactions and bank accounts are imbibed with some other business’ marijuana profits? Going even further, is that building then possibly subject to seizure under federal law? It really mushrooms when you consider the whole picture. Utility bills, insurance, operational costs: everything that’s paid for by that business is now questionable.

If you agree with the interpretation that employees of marijuana dispensaries derive their income from illegal activities and that banking them requires continuing SARs, then the only reasonable business decision would be not to bank them at all. The value of a simple consumer relationship does not support the costs of filing SARs. I'm not certain what you can do about the power company that sells the vendor electricity...

https://www.govtrack.us/congress/bills/113/hr2652

H.R. 2652: Marijuana Businesses Access to Banking Act of 2013

Introduced:
Jul 10, 2013
Status:
Referred to Committee on Jul 10, 2013
Prognosis
2% chance of being enacted

I am located in Maine, where medical marijuana is legal...my Bank has decided not to provide banking services to individuals/businesses that grow/sell/distribute medical marijuana and we are all clear on that. However, what is a stumble, is what you have touched upon in this thread; We have hydroponic supply stores, tobacco shops, landlords, etc. - that are all deriving some portion, if not all, of their profits from the medical marijuana industry. Be it sales of growing supplies, smoking supplies, or the renting of a space to grow marijuana or to smoke it.

I am interested to see other banks thoughts/processes are on this - how do you handle these relationships? Do you have in your policy that you will/will not do business with these entities? Do you have an enhanced process that you go through when you identify them? Are you completing SARs on the landlords, supply stores, etc.? Are you asking questions at account opening specific to ANY involvement with marijuana/marijuana proceeds?

I can understand both sides of the coin on this, but we would be filing SARs on our whole customer base (ok, maybe an exaggeration) and you are spot on - what could we do about the power company??

California poster here. We have opted to not bank dispensaries nor employees of dispensaries. We discussed if we had decided to only bank the employees of dispensaries, we would have been filing continuous Limited SARs until they had a new employer or no longer banked with us. Our hypothetical decision to file continuously was based on the fact that the funds are derived from illegal activity under federal law, even if no other unusual account activity had occurred. We could not come to a reasonable agreement on where reporting should end in regards to landlords, supply stores, etc. The largest disagreement was obligation based on customer status versus unknown suspect. Not enough agreement and too much risk for a small community bank. So we opted to avoid the business altogether and close accounts of individuals when/if it is determined they are employed by dispensaries.