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#792286 - 08/09/07 09:02 PM Guidance on Medical Marijuana accounts?
WonderWoman Offline
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WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
We've decided as a bank to no longer open business accounts for Medical Marijuana providers. (due to the money laundering risks)

This has created a heated discussion.

As federally regulated banks, could we get into trouble for banking someone we know is conducting activity that is illegal federally - but legal in the state? And would we then have to "police" them like we police our MSB accounts? (Have copies of their prescriptions ... etc ...)

What is your opinion? and is there any guidance on this issue?
Last edited by newbsa; 08/10/07 12:11 AM.
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#792384 - 08/09/07 11:06 PM Re: Your stance on Marijuana Coops? WonderWoman
Dolly Nugent Offline
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Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
If your bank has made a decision not to open these accounts, they did a poor job of communicating this fact to your branch operations.

I don't want to interject my opinion on the issue, but your deposit agreement might indicate that you can close an account for any reason. If you don't want the accounts, close them. If they ask why, simply tell them that you are uncomfortable with the nature of their occupation ("pot farmer"). As banks, we can refuse business.

Lastly, if you believe that there is illegal activity, file a SAR.
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#792428 - 08/10/07 12:13 AM Re: Your stance on Marijuana Coops? Dolly Nugent
WonderWoman Offline
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WonderWoman
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I've edited my question some. I know to file a SAR if I feel there's anything illegal going on - however, it's legal in CA.

I'm trying to see if there's something out there I can show to my Operations staff that confirms we should not be housing these accounts ...

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#793058 - 08/10/07 08:40 PM Re: Your stance on Marijuana Coops? WonderWoman
Dolly Nugent Offline
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Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
What does your senior management think about this?
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#793231 - 08/13/07 11:07 AM Re: Guidance on Medical Marijuana accounts? WonderWoman
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Interesting question, but the fact the activity is legal under state law is simply irrelevant. While the debate may rage within California, the DEA (and probably the rest of the country) doesn't take it too seriously. Even if a bank chose to rely on the state law as its shield, California's use of "local" standards would dictate that you would need an intense level of knowledge of your customer's operations and local law to be certain their operations were in compliance with state law.

Regardless, federal law enforcement could definitely go after a bank that accepted these accounts and did not classify the activity as suspicious based on federal law; i.e. did not file SARs. I can also imagine the Feds making a "poster child" out of a bank saying it was complicit in the violations of federal law.

Should any bank want to open an account for a business when it knows it will be filing SARs on the account activity in perpetuity?
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#795581 - 08/15/07 07:25 PM Re: Guidance on Medical Marijuana accounts? Elwood P. Dowd
WonderWoman Offline
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WonderWoman
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gone fishin'
I completely agree with you Ken, I'm just in a frustrating position (I'm not high enough on the totem pole).

The call to not open these accounts has come from the Board. However; enforcement hasn't drizzled down the lines of communication. It's always been up to the Operations side whether to keep/close accounts (everything is about sales, retention, & profitability).

I wish there was guidance or a law somewhere that I could point to - or an example of a bank that got cited/criticized.
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#795595 - 08/15/07 07:33 PM Re: Guidance on Medical Marijuana accounts? WonderWoman
John Burnett Offline
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John Burnett
Joined: Oct 2000
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Cape Cod
Originally Posted By: newbsa
(I'm not high enough on the totem pole).


Just remember that if it weren't for those near the bottom of the totem pole holding the high muckamucks up, the top of the pole would be on the ground.
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