By Diana Strade, Senior Associate Consultant
RLR Management Consulting, Inc.

The marijuana industry is here and becoming more prevalent, with 33 states having legalized medical marijuana. 10 states and the District of Columbia have “legalized” recreational marijuana (with more seemingly to follow). The SAFE (Safe and Fair Enforcement) Act that was introduced to the House of Representatives in March 2019 may ease the fear of banking MRBs.

The SAFE Act would also require federal regulatory agencies to develop guidance around banking MRBs. We currently are not aware of federal examination procedures for MRBs; however, because of the Bank Secrecy Act (BSA) risks regarding these high risk businesses, we can certainly see where examinations will cover this topic at some point in time.

Is your BSA Program up to date?

• How does your institution define an MRB?
• Have you established a method to effectively identify MRBs at your institution?
• Have you developed policies, procedures, and risk assessments?
• What is your process if you identify an MRB customer and is it documented?

RLR has developed an MRB audit program within our BSA audit process. Our work paper was designed around the guidance provided by FinCEN (FIN-2014-G001 BSA Expectations Regarding Marijuana-Related Businesses) and is very detailed with respect to all aspects of your BSA program. Even if your financial institutions policy is to not bank MRBs, there are still responsibilities and information that must be in your risk assessment, policies, and procedures.

Contact us below if you would like more information about how MRBs will affect your BSA program or if you would like to schedule a BSA audit.