Decline In Banks Working With Marijuana Businesses Has ‘Leveled Off,’ New Federal Data Shows

MJ moment

The number of banks and credit unions that report servicing marijuana businesses seems to be stabilizing, according to new federal data. For three quarters in a row, those numbers were consistently declining—due partly to revised reporting requirements from the Financial Crimes Enforcement Network (FinCEN) and also because of the coronavirus pandemic. But the latest report signals that the trend is lifting. As of December 31, there were 684 banks and credit unions that filed reports saying they were working with cannabis clients. That slightly up from the previous quarter, though it’s still down from a peak of 747 in late 2019. Via FinCEN. A major reason for the steady decline in the months since is because FinCEN, which is part of the Treasury Department, stopped including hemp-only businesses in their quarterly reports since the crop was federally legalized under the 2018 Farm Bill—which accounts for at least part of the dip as compared to prior figures that counted hemp-focused accounts. FinCEN said the number of banks that work with marijuana businesses “appears to have leveled off from a decline,” but it still noted the impact of the pandemic on the latest figures. “The decline coincided with the release of guidance by FinCEN and financial regulators on providing financial services to customers engaged in hemp-related business activities,” the report states. “The COVID-19 pandemic may be adding to this apparent decline for two reasons.” Those reasons are: 1) some cannabis businesses may have closed down because of state restrictions amid the health crisis and 2) “reduced staffing” at financial institutions could have affected how many Suspicious Activity Reports (SAR) were filed. Via FinCEN. That said, most states allowed cannabis companies to continue to operate as essential services during the pandemic, and states like Illinois have continued to see record-breaking sales despite the…

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Source : Decline In Banks Working With Marijuana Businesses Has ‘Leveled Off,’ New Federal Data Shows

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