Number Of Banks Working With Marijuana Businesses Stabilizes Following Multi-Quarter Decline

MJ moment

The number of banks and credit unions that report working with marijuana businesses remained stable over the last quarter, according to recently published federal data. For the last three quarters of 2020, those numbers had been consistently declining—due partly to revised reporting requirements from the Financial Crimes Enforcement Network (FinCEN) and also because of the coronavirus pandemic. But things seem to have stabilized over the most recent two quarters. As of March 31, there were 684 banks and credit unions that filed reports saying they were working with cannabis clients. That’s the exact same number from the previous quarter, though it’s still down from a peak of 747 in late 2019. Via FinCEN. A major reason for the prior decline last year 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. “The number of depository institutions (DIs) banking marijuana-related businesses (MRBs) appears to have leveled off from a decline that started at the end of the 1st Quarter FY2020 (December 2019),” FinCEN said in its latest quarterly analysis. “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.” Another factor in the prior dip could have been the COVID-19 pandemic, which “may be adding to this apparent decline due to state imposed restrictions or closures and potential delays in SAR filings,” the federal agency continued. Via FinCEN. Under FinCEN guidance issued by the Obama administration in 2014 that remains in effect, banks and credit unions are required to submit SARs if they elect to provide financial services to marijuana businesses.…

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