With all of the conversation surrounding the BSA enforcement issues with respect to virtual currencies like Bitcoin and others, I found this article posted on www.philly.com to be very interesting and sheds some light on another very complicated situation. The article discusses the issues that arise with respect to BSA and financial institutions, as states legalize the use and sale of marijuana.
The problem, as stated in the article, is that although recreational use and state licensed growers/distributors are not prohibited by state law in a couple states, they are still prohibited under Federal Law and there is no clarification with respect to the ability for the businesses involved in these industries to set up legal bank/credit union accounts. Without clarification most financial institutions are reluctant to open these accounts for fear of prosecution. This ultimately forces these businesses to operate using only cash, which in turn creates a whole new list of problems. However, it is a tricky and complicated situation. It will be very interesting to see what comes of the “closed-door meetings” that this article references.
FinCEN is aware of the issue and is in the process of discussions to determine the best course of action, although it does not appear that we should expect clarification anytime soon. One thing is for sure, we are entering a period of time in which the BSA will need to evolve to meet this countries changing financial and legal landscape.