FinCEN

FinCEN: All’s Well With Marijuana Banking

Apparently, FinCEN chief Jennifer Shasky Calvery has surveyed the battleground that is marijuana banking, decided that the battle has been won, and is telling the world to “move along now, nothing to see here” (paid subscription required).

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.

[…]

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.”

Reporter Kevin Wack points out what Ms. Calvery does not: 105 financial institutions is less that 1% of the total number of financial institutions, which means that 99% of all financial institutions won’t do business with marijuana businesses that are legal under state law as long as dealing in marijuana is illegal under federal law. Most financial institutions in states like Colorado and Washington, where recreational marijuana sales and use are legal under state law, will simply not do business with purveyors of flammable and/or edible hemp-related products.

So, if the “intended effect” of the FinCEN guidance was to encourage financial institutions to bank marijuana businesses, it’s difficult to see how she can make that statement with a straight face. In fact, our inside sources tell us that upon leaving the venue of her speech, Ms. Calvery was kidnapped by “Black Ops” storm troopers of the OCC and waterboarded until she coughed up the names of the Gang of 105.

There will be blood…

On another positive note, Ms. Calvery assured bankers that all those SARs they’ve been filing, including those “Cheech & Chong SARs” that related solely to the weed-related, are not being eaten by FinCEN’s pet goat.

Between January and March 2014, teams across the country reviewed more than 180,000 of the more than 290,000 suspicious activity reports that were filed, according to the speech, which also details how the reports have been used to catch various kinds of criminals.

“So, as you can see, BSA reporting does not go into a ‘black hole’ as suggested by some in the financial industry,” Shasky will say.

Well, knowing that 38% of the SARs filed are not reviewed doesn’t exactly fill me with anything other than inertia. How about you? Are you all fired up, ready to go (file a SAR)? As to the 62% of SARs that were actually “reviewed,” Ms. Calvery does not tell us with what kind of detail those reviews were performed. A cadre of anal-retentive Einsteins parsing the nuances with electron microscopes is one thing. A crew of high school students getting their community service credits in the bag while sitting in a SAR-filled bullpen sipping Red Bull and giving each other wedgies is another thing.

I’m still betting that there’s a goat involved.

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