Are Marijuana Limited SAR Filings required on Indirect Marijuana Related Businesses (i.e. bank has a loan to a commercial landlord that leases property to a marijuana related business (MRB))? What are you seeing in the industry regarding filing Marijuana Limited SARs on Indirect Marijuana Related Businesses?
Marijuana Limited SAR Filings: FIN-2014-G001 (BSA Expectation Regarding Marijuana-Related Businesses) indicates the following:
“Marijuana Limited” SAR Filings - A financial institution providing financial services to a marijuana-related business that it reasonably believes, based on its customer due diligence, does not implicate one of the Cole Memo priorities or violate state law should file a “Marijuana Limited” SAR. The content of this SAR should be limited to the following information: (i) identifying information of the subject and related parties; (ii) addresses of the subject and related parties; (iii) the fact that the filing institution is filing the SAR solely because the subject is engaged in a marijuana-related business; and (iv) the fact that no additional suspicious activity has been identified. Financial institutions should use the term “MARIJUANA LIMITED” in the narrative section.
Further, footnote #7 of FIN-2014-G001 indicates the following:
7 FinCEN recognizes that a financial institution filing a SAR on a marijuana-related business may not always be well-positioned to determine whether the business implicates one of the Cole Memo priorities or violates state law, and thus which terms would be most appropriate to include (i.e., “Marijuana Limited” or “Marijuana Priority”). For example, a financial institution could be providing services to another domestic financial institution that, in turn, provides financial services to a marijuana-related business. Similarly, a financial institution could be providing services to a non-financial customer that provides goods or services to a marijuana-related business (e.g., a commercial landlord that leases property to a marijuana-related business). In such circumstances where services are being provided indirectly, the financial institution may file SARs based on existing regulations and guidance without distinguishing between “Marijuana Limited” and “Marijuana Priority.”
Whether the financial institution decides to provide indirect services to a marijuana-related business is a risk-based decision that depends on a number of factors specific to that institution and the relevant circumstances. In making this decision, the institution should consider the Cole Memo priorities, to the extent applicable.
I have reviewed some example MRB policies vendors and one of them I found on the internet (Sterling Compliance, Cannabis Banking Policy) stated:
“Marijuana-Limited SARs should be filed on businesses directly involved in a marijuana-related business (e.g. cultivator, processer, dispensary). FinCEN has communicated informally that Marijuana-Limited SARs are not required to be filed for businesses that are indirectly involved in a marijuana-related business.” The footnote to this policy comment states “This has not been written into formal guidance as of August 2019; FinCEN has communicated this only on a financial institution-by-financial institution basis. As such, you may consider reaching out to FinCEN directly to obtain confirmation and discussing the filing requirements and expectations with your regulators.”
To further muddy the question, I have found an OCC Supervisory Memorandum (see website here: https://www.governmentattic.org/38docs/OCCmarijuanaMemo_2020.pdf
) dated May 12, 2020 that appears to indicate they don’t know the answer to my question either. See Question #10 on the document. Other than calling FinCEN, what are you seeing in the industry for filing Marijuana Limited SARs on Indirect MRBs?