Page 18 - 1Q 2018 Reporter

Up in Smoke?

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Though it is still early in the year, involving minors, guns, or criminal enterprises.
2018 has already made its mark on banks
The memo indicated the former
nationwide. From laborious HMDA amendment
administration’s perspective on enforcement of
implementation to digesting Consumer Financial
the CSA with regard to marijuana, and opened
Protection Bureau (CFPB) policy metamorphosis,
up dialogue between MRBs and potential service
banking professionals occupy an uneasy space
providers, including banking institutions. The
to say the least. Adding smoke to the fire, U.S.
Financial Crimes Enforcement Network (FinCEN)
Attorney General Jeff Sessions announced in
issued guidance for financial institutions in 2014
early January the rescission of the so-called
to provide a framework for dealing with MRB
“Cole Memo,” which had instructed federal
relationships and transactions. The industry
prosecutors nationwide not to dedicate resources
appeared to be well on its way to achieving
to marijuana activities increasingly deemed legal
legitimacy status, though the dragon in the room
under state laws. The Cole Memo had provided
that everyone increasingly ignored was the
some breathing room for financial institutions
continued existence of a federal law prohibiting
to engage in providing services to marijuana-
the very activities in which the MRBs were
related businesses (MRBs), leading to nearly
engaged.
400 institutions nationwide providing such
Enter U.S. Attorney General Jeff Sessions,
services by the end of 2017.
long-time outspoken opponent of marijuana
The original memo and subsequent
use. In April of 2017, Sessions wrote a letter to
clarifications provided space for federal
congressional leaders emphasizing the dangers
prosecutors to forego comprehensive
of marijuana and requested they not approve an
enforcement of the Controlled Substance Act
appropriations rider barring the use of federal
(CSA), which is a federal law prohibiting the
funds to prevent certain states from implementing
production, processing, or sale of marijuana.
state laws permitting possession, cultivation,
This direction was issued based on the growing
distribution, or use of medical marijuana. A federal
number of state laws initially permitting medicinal
district and appellate court have interpreted that
use of the substance, and eventually provisions
rider to include a prohibition on prosecutions
permitting the recreational use of the drug. The
of both state officials and private individuals.
memo was clear that federal resources should
Questions remain as to the applicability of the
be dedicated to those marijuana crimes with
rider to recreational use, but the likely answer is
the most severe implications, such as crimes
that it does apply to both medical and recreational

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March 2018 IllInoIs RepoRteR