A Michigan credit union consented to a cease-and-desist order issued by the National Credit Union Administration Board (NCUA) for AML failures related to banking marijuana regulated businesses (MRBs). The shortcomings involve the fact that the credit union lacked automated compliance and suspicious activity monitoring systems that meet FinCEN’s 2014 guidance on BSA-related expectations when banking MRBs.
In addition to ceasing opening new MRB accounts, the credit union also agreed to cease its Money Services Business (MSB) program and suspend transactions in MSB accounts, which indicates further issues in its performance of Enhanced Due Diligence for other higher risk customers. This is another example that – while banking higher-risk accounts might generate additional revenues – it needs to be supported by automated systems and processes tailored to address the additional, ongoing due diligence required. The NCUA cease-and-desist order is available here, and FinCEN’s 2014 guidance regarding banking MRBs is available here.