Treasury urges White House to approve plan to collect marijuana business bank records

The U.S. Treasury Department has formally sent the White House its proposal to begin collecting data on marijuana businesses from banks — in addition to industries it already tracks such as liquor stores, convenience stores, casinos and dealers. of cars – as part of its ongoing efforts to combat money laundering activities.

In a notice published in the Federal Register late last week, the Treasury’s Office of the Comptroller of the Currency (OCC) said it has completed initial procedural steps on the plan and will accept a final round of public comments as the White House Office of The Office of Management and Budget (OMB) conducted a review.

The OCC first announced the proposal in June, saying it plans to track marijuana businesses as part of an annual Risk Summary Form (RSF) to be submitted by financial institutions. It is seen as another sign of the federal government’s recognition of the state’s legal cannabis market, even though marijuana remains a federally controlled substance.

“RSF collects data on different products, services, customers and geographies (PSCs)”, says the latest announcement. To that end, the Treasury said it wants to add “marijuana-related businesses” to the list of markets it monitors, as well as five other new categories such as crypto assets and ATM operators.

Through the OCC.

The department said its Money Laundering Risk System “enhances the ability of bank examiners and management to identify and assess” risks that are “related to bank products, services, customers and locations”.

As new products and services emerge, “banks’ assessment of money laundering and terrorist financing risks must also evolve.” Therefore, by making these changes to its data collection process, the agency said it will be better able to “identify those institutions, and areas within institutions, that may present increased risk and allocate screening resources accordingly.” with the circumstances”.

A final public comment period on the proposed changes is open until October 11.

In August, the National Cannabis Industry Association (NCIA) submitted a comment following the initial announcement of the proposal. He said the organization is “pleased to see the OCC recognize the impact that marijuana-related businesses have on our financial system.”

The NCIA said it supports the department’s “efforts to improve data collection for this relatively new sector, to increase transparency in the industry for regulators and to help reduce some of the administrative burden on banks so that more institutions choose to serve the industry”.

“The challenges resulting from the lack of banks are not limited to cannabis businesses, but also affect the entities that choose to engage and serve them; including the financial institutions themselves. Consequently, the MLR risk assessment is an important tool for the OCC’s Bank Secrecy Act/Anti-Money Laundering and OFAC oversight activities because it allows the agency to better identify those institutions, and areas within institutions, that may pose a risk of increase and allocate examination resources accordingly.”

It’s not immediately clear how the information collected in the RSF — which, if passed, would require financial services providers to report both the number of their marijuana business accounts and their total volume — is analyzed or shared by The OCC after it is submitted by the banks, but the notice says the data allows the agency to “better identify those institutions, and areas within institutions, that may present increased risk and allocate examination resources accordingly.”

Information on the number of financial institutions working with cannabis-related businesses is already reported through the Suspicious Activity Reports (SARs) that banks and credit unions are required to file under existing guidelines, and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN ) publishes that data. on a quarterly basis.

The number of banks reporting that they work with marijuana businesses rose again near the end of 2021—with 755 banks and credit unions filing reports by September 30, 2021—according to FinCEN’s last update in March.

As Congress works to advance legislation to end the federal ban on cannabis and reform banking policies related to the marijuana industry, the government has quietly acknowledged and normalized its existence despite the fact that cannabis remains a Schedule I drug. Under the Controlled Substances Act.

For example, the US Census Bureau announced last year that it would begin collecting and compiling data on the revenue states generate from legal marijuana.

The move — to add a cannabis question to the annual reports that states submit — builds on a separate notice the federal agency posted last year that explained it would include state-level cannabis tax data in its quarterly reports.

Meanwhile, in 2021, the U.S. Economic Classification Policy Committee—which consists of the White House Office of Management and Budget, the Census Bureau, the Bureau of Economic Analysis, and the Bureau of Labor Statistics—recommended a change to policy to include cannabis businesses as an official designation in the North American Industry Classification System (NAICS), which is used to categorize and compile employment and market data for industries throughout the US, Mexico and Canada.

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