Bank Law Monitor

Bank Law Monitor

A Legal Blog for the Financial Services Industry

The OCC Doubles Down on Fintech Banks

Posted in Banking, Trending News

Traditional banks and lenders may soon see some increased competition from actors in the financial technology industry. As we previously discussed, the Office of the Comptroller of the Currency (OCC) has led the regulatory charge by inviting so-called “fintech” companies to apply for special purpose national bank charters. Soon after this invitation was extended in 2016, the Conference of State Bank Supervisors (consisting of state banking regulators) filed a lawsuit in 2017 hoping to block the OCC’s fintech charter, but the lawsuit was dismissed in 2018. With that lawsuit behind it, the OCC recently announced that it will begin accepting applications for special purpose charters from non-depository fintech companies, such as online lenders and payments companies.

The OCC’s announcement will likely stir up some strong feelings among those in the traditional banking and lending industries hoping to preserve the status quo. Here are a few things we can expect from the announcement: Continue Reading

The STATES Act—A Solution to the Cannabis Banking Problem on the Horizon?

Posted in Banking, Cannabis, Regulatory Developments

By Danielle Hunt, Kalin Bornemann, Olivia Grabacki, and Jessica Roberts

As we previously discussed, financial institutions that offer financial services to the cannabis industry have been operating in a state of uncertainty in the wake of the rescission of the so-called “Cole Memo” earlier this year. Without the comfort of the Cole Memo, those financial institutions nevertheless continued to operate under a set of guidelines previously published by the Financial Crimes Enforcement Network (FinCEN). As you can guess, most financial institutions have been wary to deal with individuals or businesses with ties to the recreational cannabis industry due to this lack of clear federal guidance. However, these times of uncertainty could soon be changing. With the fresh introduction of Senate Bill 3032, also known as the Strengthening the Tenth Amendment Through Entrusting States Act (the “STATES Act“), clarity and security could be on the horizon for financial institutions hoping to “take the plunge” and offer services to the cannabis industry.

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Update: DOJ Rescinds the Cole Memo—FinCen Guidance Still in Effect, For Now…

Posted in Cannabis, Regulatory Developments

In the wake of the shift in federal marijuana enforcement policy, financial institutions have been left to speculate the risk in offering financial services to marijuana-related businesses. While the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance in 2014 that laid out a process for financial institutions to open accounts for marijuana-related businesses, that guidance was premised on the enforcement priorities of the Cole Memo. After last month’s rescission of the Cole Memo, financial institutions have been patiently waiting for any guidance from FinCEN as to how to proceed with providing financial services to marijuana and marijuana-related businesses. And after weeks of waiting, stakeholders are finally receiving confirmation that the FinCEN guidance remains in effect—for now.

In the wake of the Cole Memo rescission, members of Congress have been advocating for FinCEN’s guidance to remain in place. A bipartisan group of 31 members of the House of Representatives jointly sent a letter to FinCEN encouraging the agency to continue following the 2014 guidance. The House members stated in the letter that “FinCEN’s stated priorities have allowed [marijuana] businesses to conduct commerce more safely through financial institutions which reduces the use of all cash, improves public safety, and reduces fraud,” and warned FinCEN that rescinding its guidance would “inject uncertainty into the financial markets.” Continue Reading

DOJ Rescinds the Cole Memo—What It Means for Your Financial Institution

Posted in Cannabis, Regulatory Developments

Reiterating that Congress considers marijuana to be a “dangerous drug” and marijuana activity to be a “serious crime,” Attorney General Jeff Sessions today issued a memo to all U.S. attorneys rescinding various memoranda related to enforcement of federal marijuana laws issued during the Obama administration. Included in the rescinded memos was the prominent “Cole Memo,” which discouraged federal prosecution of anyone in compliance with the marijuana laws of their state. As we previously discussed, the Cole Memo specifically provided the justification on which many banks and credit unions decided to offer financial services to marijuana and marijuana-related businesses. While the full effects of Sessions’ memo remain unclear, today certainly appears to mark a shift in the federal government’s stance on state-legalized marijuana, and the future of marijuana banking is as hazy as ever. Continue Reading