American CBA LLC

The long-awaited recommendation by the Justice Department to reschedule cannabis is welcome news for cannabis businesses and financial institutions who work with these businesses. This recommendation will start a lengthy rule-making process. From the initial proposal and comment phases to a rule's final promulgation, this process takes many months. It is therefore important to understand that nothing changes for now.

When cannabis is rescheduled, this will likely mean some de-risking for financial institutions working in this space. However, financial institutions will need to continue to classify these accounts as higher risk because cannabis will still be considered illegal under federal law. For financial institutions, the BSA/compliance requirements now continue to remain in place, at least until FinCEN updates its 2014 Guidance.

In this webinar, we will cover:

• Justice Department's Recommendation to Reschedule Cannabis: Understand the impact of the Justice Department's recent recommendation to reschedule cannabis and how this could signal a shift in regulatory perspectives that affect both cannabis businesses and financial institutions.
• Immediate Implications for Financial Institutions: Clarify that despite the potential long-term benefits of rescheduling, there are no immediate changes in the legal status of cannabis. Financial institutions must continue to operate under current federal laws and compliance requirements. 
• De-Risking and Continued Risk Classification: Explore the potential de-risking benefits for financial institutions if cannabis is rescheduled, while also stressing the necessity to continue classifying these accounts as higher risk due to the ongoing federal illegality of cannabis.

Ongoing Compliance Requirements: Discuss the ongoing requirement for financial institutions to adhere to the Bank Secrecy Act (BSA) and FinCEN’s 2014 Guidance until further updates are made, highlighting the need for banks to stay vigilant and up to date with regulatory changes.