Alert! Credit Union Penalized for Marijuana!

on "May 13, 2021 8:34 am"

What was in the consent order between credit union and NCUA? What does your marijuana and hemp program contain? Do you know if you have marijuana or hemp related businesses? Here is what the credit union agreed to do.

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Alert! Credit Union Penalized for Marijuana!
Tuesday, June 1, 2021
5:00 am - 6:30 am HST

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The Credit Union consents to the following terms and conditions of the Order and to take the following actions:

  • A. Implement an automated system to effectively monitor and identify all transaction for suspicious activity in accordance with 31 C.F.R. §1020.210(a)(2)(v)(B), by April 30, 2021, and ongoing. Your automated compliance and suspicious activity monitoring system must include functions to support your compliance with FinCEN requirements for Marijuana-Related Businesses ("MRB"). At a minimum, this includes:
    • 1. Reconciliation of MRB Point of Sale, METRC, or accounting system data relative to member deposits.
    • 2. Ongoing monitoring of adverse public information affecting MRBs.
    • 3. Timely verification of changes in licensure status, including notification of a lapse in an MRB's state licensure.
    • 4. Systematic monitoring of unusual Automated Clearing House or wire activity for MRB accounts.
    • 5. Monitoring of FinCEN "Red Flags" outlined in FIN-2014-G001, "BSA Expectations Regarding Marijuana-Related Businesses."
  • B. Engage a third party to validate your automated compliance and suspicious activity monitoring system simultaneously with the implementation of this system.
  • C. Immediately file all Suspicious Activity Reports ("SARs") in accordance with 31 C.F.R. §1020.320. This includes continuous and initial MRB SARs. Develop and implement a system to ensure all SARs are filed accurately, completely, and on time by March 31, 2021.
  • D. Immediately develop and implement a system to ensure all Currency Transaction Reports are filed accurately in accordance with 31 C.F.R. §1020.311.
  • E. Immediately cease opening new MRB accounts.
  • F. Cease your Money Services Business ("MSB") program by March 15, 2021. This includes suspending transactional activity on existing MSB accounts.
  • G. Engage a qualified third party to perform a retrospective review of your MSB activity to determine the existence of suspicious activity warranting a SAR filing by March 15, 2021. At a minimum, the review must evaluate the criteria outlined in FIN- 2019-A003, "Advisory on Illicit Activity Involving Convertible Virtual Currency." File any SARs recommended by the third party.

Be proactive. Ignoring the industry won't help your organization. You need policy and procedures even if you decide not to bank marijuana and hemp customers.

What you will learn:

  • Components of a marijuana and hemp program
  • When do you have to file SARs?
  • What should be in your policy, your procedures and your questionnaires
  • What should you do if you don't want to bank marijuana but you do want to bank hemp?
  • Make your risk assessment

Who Should Attend?

Compliance Officers, BSA Officers, New Accounts, Branch Administration, Security, Training and HR.

About The Presenter

Deborah Crawford is the President of Gettechnical Inc., a Virginia based training company. She specializes in the deposit side of the financial institution and is an instructor on IRAs, BSA, Deposit Regulations and opening account procedures. She was formerly with Hibernia National Bank (now Capital One) and has bachelor's and master's degrees from Louisiana State University. She has 30+ years of combined teaching and banking experience.