Bloomberg Technology: “Cannabis companies are turning to the world’s most popular digital currency in an effort to get rid of all that cash. The inability to access traditional financial institutions is one of the marijuana industry’s biggest impediments. Legal cannabis was a $6 billion industry last year and is expected to grow to $50 billion by 2026, according to Cowen & Co. But because pot is illegal under federal law, big banks and credit-card companies steer clear. That’s forced most merchants to accept cash only, a logistical headache and constant security threat. Enter bitcoin, the cryptocurrency that consists of digital coins “mined” by computers solving increasingly complex math problems.”
USA Today: “Securing something as simple as a checking account in the legal cannabis business can be nearly impossible. That’s because banks are wary that federal agencies will slap them with money-laundering charges — despite assurances to the contrary. . . . But one credit union here has broken step with the banking industry. Maps Credit Union is the only financial institution in Oregon openly serving marijuana businesses”
Time: “A new law signed by the governor offers a symbolic fix to a serious problem. Colorado Gov. John Hickenlooper signed a bill Friday designed to create the world’s first state-level banking system for legal cannabis companies, which have complained that their lack of access to basic banking services creates difficult and dangerous risks.”
U.S. Department of Justice
Office of the Deputy Attorney General
The Deputy Attorney General Washington, D.C. 20530
February 14, 2014
MEMORANDUM FOR ALL UNITED STATES ATTORNEYS
FROM: James M. Cole, Deputy Attorney General
SUBJECT : Guidance Regarding Marijuana Related Federal Crimes
On August 29, 2013, the Department issued guidance (August 29 guidance) to federal prosecutors concerning marijuana enforcement under the Controlled Substances Act (CSA). The August 29 guidance reiterated the Department’s commitment to enforcing the CSA consistent with Congress’ determination that marijuana is a dangerous drug that serves as a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. In furtherance of that commitment, the August 29 guidance instructed Department attorneys and law enforcement to focus on the following eight priorities in enforcing the CSA against marijuana-related conduct:
- Preventing the distribution of marijuana to minors;
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
- Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.
Under the August 29 guidance, whether marijuana-related conduct implicates one or more of these enforcement priorities should be the primary question in considering prosecution under the CSA. Although the August 29 guidance was issued in response to recent marijuana legalization initiatives in certain states, it applies to all Department marijuana enforcement nationwide. The guidance, however, did not specifically address what, if any, impact it would have on certain financial crimes for which marijuana-related conduct is a predicate.
The provisions of the money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act (BSA) remain in effect with respect to marijuana-related conduct. Financial transactions involving proceeds generated by marijuana-related conduct can form the basis for prosecution under the money laundering statutes (18 U.S.C. §§ 1956 and 1957), the unlicensed money transmitter statute (18 U.S.C. § 1960), and the BSA. Sections 1956 and 1957 of Title 18 make it a criminal offense to engage in certain financial and monetary transactions with the proceeds of a “specified unlawful activity,” including proceeds from marijuana-related violations of the CSA. Transactions by or through a money transmitting business involving funds “derived from” marijuana-related conduct can also serve as a predicate for prosecution under 18 U.S.C. § 1960. Additionally, financial institutions that conduct transactions with money generated by marijuana-related conduct could face criminal liability under the BSA for, among other things, failing to identify or report financial transactions that involved the proceeds of marijuana-related violations of the CSA. See, e.g., 31 U.S.C. § 5318(g). Notably for these purposes, prosecution under these offenses based on transactions involving marijuana proceeds does not require an underlying marijuana-related conviction under federal or state law.
As noted in the August 29 guidance, the Department is committed to using its limited investigative and prosecutorial resources to address the most significant marijuana-related cases in an effective and consistent way. Investigations and prosecutions of the offenses enumerated above based upon marijuana-related activity should be subject to the same consideration and prioritization. Therefore, in determining whether to charge individuals or institutions with any of these offenses based on marijuana-related violations of the CSA, prosecutors should apply the eight enforcement priorities described in the August 29 guidance and reiterated above. Footnote 1. For example, if a financial institution or individual provides banking services to a marijuana-related business knowing that the business is diverting marijuana from a state where marijuana sales are regulated to ones where such sales are illegal under state law, or is being used by a criminal organization to conduct financial transactions for its criminal goals, such as the concealment of funds derived from other illegal activity or the use of marijuana proceeds to support other illegal activity, prosecution for violations of 18 U.S.C. §§ 1956, 1957, 1960 or the BSA might be appropriate. Similarly, if the financial institution or individual is willfully blind to such activity by, for example, failing to conduct appropriate due diligence of the customers’ activities, such prosecution might be appropriate. Conversely, if a financial institution or individual offers services to a marijuana-related business whose activities do not implicate any of the eight priority factors, prosecution for these offenses may not be appropriate.
The August 29 guidance rested on the expectation that states that have enacted laws authorizing marijuana-related conduct will implement clear, strong and effective regulatory and enforcement systems in order to minimize the threat posed to federal enforcement priorities. Consequently, financial institutions and individuals choosing to service marijuana-related businesses that are not compliant with such state regulatory and enforcement systems, or that operate in states lacking a clear and robust regulatory scheme, are more likely to risk entanglement with conduct that implicates the eight federal enforcement priorities. Footnote 2. In addition, because financial institutions are in a position to facilitate transactions by marijuana-related businesses that could implicate one or more of the priority factors, financial institutions must continue to apply appropriate risk-based anti-money laundering policies, procedures, and controls sufficient to address the risks posed by these customers, including by conducting customer due diligence designed to identify conduct that relates to any of the eight priority factors. Moreover, as the Department’s and FinCEN’s guidance are designed to complement each other, it is essential that financial institutions adhere to FinCEN’s guidance. Footnote 3. Prosecutors should continue to review marijuana-related prosecutions on a case-by-case basis and weigh all available information and evidence in determining whether particular conduct falls within the identified priorities.
As with the Department’s previous statements on this subject, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion. This memorandum does not alter in any way the Department’s authority to enforce federal law, including federal laws relating to marijuana, regardless of state law. Neither the guidance herein nor any state or local law provides a legal defense to a violation of federal law, including any civil or criminal violation of the CSA, the money laundering and unlicensed money transmitter statutes, or the BSA, including the obligation of financial institutions to conduct customer due diligence. Even in jurisdictions with strong and effective regulatory systems, evidence that particular conduct of a person or entity threatens federal priorities will subject that person or entity to federal enforcement action, based on the circumstances. This memorandum is not intended, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter civil or criminal. It applies prospectively to the exercise of prosecutorial discretion in future cases and does not provide defendants or subjects of enforcement action with a basis for reconsideration of any pending civil action or criminal prosecution. Finally, nothing herein precludes investigation or prosecution, even in the absence of any one of the factors listed above, in particular circumstances where investigation and prosecution otherwise serves an important federal interest.
1. The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing concurrent guidance to clarify BSA expectations for financial institutions seeking to provide services to marijuana-related businesses. The FinCEN guidance addresses the filing of Suspicious Activity Reports (SAR) with respect to marijuana-related businesses, and in particular the importance of considering the eight federal enforcement priorities mentioned above, as well as state law. As discussed in FinCEN’s guidance, a financial institution providing financial services to a marijuana-related business that it reasonably believes, based on its customer due diligence, does not implicate one of the federal enforcement priorities or violate state law, would file a “Marijuana Limited” SAR, which would include streamlined information. Conversely, a financial institution filing a SAR on a marijuana-related business it reasonably believes, based on its customer due diligence, implicates one of the federal priorities or violates state law, would be label the SAR “Marijuana Priority,” and the content of the SAR would include comprehensive details in accordance with existing regulations and guidance.
2. For example, financial institutions should recognize that a marijuana-related business operating in a state that has not legalized marijuana would likely result in the proceeds going to a criminal organization.
3. Under FinCEN’s guidance, for instance, a marijuana-related business that is not appropriately licensed or is operating in violation of state law presents red flags that would justify the filing of a Marijuana Priority SAR.
FoxNews: “The Obama administration took the unprecedented step Friday of clearing the way for banks to do limited business with marijuana sellers, releasing guidelines for how financial institutions can work with pot shops in states where it’s legal. The move immediately was greeted with relief from the budding marijuana industry. Before the guidance, banks largely had avoided the new pot shops in Colorado for fear of federal prosecution — leaving marijuana sellers running cash-only operations. . . . It’s unclear, though, to what extent banks will engage those businesses. One industry group, the Consumer Bankers Association, voiced legal concerns despite the new guidelines and urged Congress to get involved.”
Politico: “The Obama administration will soon announce regulations to make it easier for banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday. ‘You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,’ Holder said during an appearance at the University of Virginia’s Miller Center. ‘There’s a public safety component to this. Huge amounts of cash—substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that would worry me, just from a law enforcement perspective’.”
New York Times: “Legal marijuana . . . businesses are conducted almost entirely in cash because it is exceedingly difficult for them to open and maintain bank accounts, and thus accept credit cards. The . . . drug remains illegal under federal law. The Controlled Substances Act, enacted in 1970 classifies marijuana as a Schedule I drug, the most dangerous category, which also includes heroin, LSD and ecstasy. As a result, banks, including state-chartered ones, are reluctant to provide traditional services to marijuana businesses. They fear that federal regulators and law enforcement authorities might punish them, with measures like large fines, for violating prohibitions on money-laundering, among other federal laws and regulations. “Banking is the most urgent issue facing the legal cannabis industry today,” said Aaron Smith, executive director of the National Cannabis Industry Association in Washington, D.C.”
Wall St. Journal: “Buying marijuana for recreational use now is legal in Colorado—and paying for it with plastic is getting easier. The official rules of Visa Inc.and MasterCard Inc. prohibit the use of their debit and credit cards for marijuana purchases, but some Colorado merchants are allowing customers to use them anyway. That is because the card giants, owners of the processing networks that handle electronic payments, have quietly decided not to enforce their rules, according to people familiar with their strategies.
Seattle Times: “For the nascent marijuana industry in Colorado and Washington there is a lot riding on a meeting Thursday in Washington, D.C., of an obscure financial-watchdog group. . . . the next big challenge: getting banking services to pot merchants so they won’t have to conduct all their business in cash. Sen. Patrick Leahy, D-Vt., chair of the Senate Judiciary Committee, implored the Treasury and Justice departments to work together to solve the problem. Now, because pot remains federally illegal, banks are loathe to provide checking accounts and loans to pot merchants for fear of being prosecuted for money laundering. On Thursday, the federal Bank Secrecy Act Advisory Group (BSAAG) will hold its first meeting since the DOJ’s watershed announcement in late August. The meeting is a chance for industry, regulators and law enforcement to have a “frank discussion,” according to a Treasury Department spokesman.”
See also “Federal Officials, Financial Industry Representatives to Address Marijuana Banking Crisis.”
Associated Press: “The Justice Department and federal banking regulators will help clear the way for financial institutions to transact business with the legitimate marijuana industry without fear of prosecution, Deputy Attorney General James Cole told Congress on Tuesday.”
Arizona Republic: “The medical-marijuana era might have arrived in Arizona, but dispensaries are stuck doing business like street-level dealers: cash only. Checking accounts and credit-card machines for state-licensed dispensaries have become casualties of a crossfire between state and federal laws. . . . banks and credit unions, which are federally insured, steer clear of Arizona’s new health buzz, citing federal regulators. Medical-marijuana proponents say banks also won’t lend to the marijuana industry out of fear of federal seizures. The cash-only conundrum is a nightmare for dispensaries“
Forbes: “The medical marijuana industry is under siege. Legal in 17 States and the District of Columbia, the marijuana dispensaries are not recognized as legal operations under federal law. Aside from the constant threat of raids and civil asset forfeiture, medical marijuana dispensaries also have to contend with payment blockades and outright refusal of banking services. This state law-federal law dichotomy has led the major payment associations and large credit card processors to shun the entire merchant category. American Express and Discover announced separately that they would follow federal law on the matter. Decisions regarding VISA and Mastercard transactions are mostly in the hands of the large acquiring processors which tend to interpret the law from the federal perspective rather than the state perspective.”
Toke of the Town: “This week the so-called invisible hand of the Feds struck again with their closed fist wantonly coming down on whomever they feel is in their way. This week’s Bay Area scorecard was 2-zip in their favor. They closed a favorite San Francisco dispensary and reminded any banking institution that does business with the pot shops that there will be unfair scrutiny for complying with the law. . . . our Cali Top Cop, in her infinite wisdom, stopped banks from doing business with dispensaries. . . . Here are the major ramifications of not being able to bank your business: there’s cash everywhere.”
Seattle Times: “Conscious Care Cooperative has a solid footing in a growing industry, with three storefronts in Seattle and a loyal customer base. But for much of the last two years, the nonprofit medical-marijuana provider has lacked one business basic: steady access to a bank. The cooperative has bounced among five financial institutions, and four others rejected the cooperative outright, said CCC’s president, Nate Chrysler. In one case, a bank closed the account without notice. . . . Aaron Smith, executive director of the Washington, D.C.-based National Cannabis Industry Association, estimates that half of dispensaries nationwide lack a bank account, which he blames on pressure from federal banking regulators. ‘It is a widespread problem that threatens the entire industry,’ he said. . . . in June, Holder deputy James Cole issued a memo warning that ‘those who engage in transactions involving the proceeds’ of marijuana sales ‘may be in violation of federal money-laundering statutes and other financial laws.”.”
HuffPost Denver: “Marijuana dispensaries in states that have legalized medical pot are struggling to obtain service from banks and credit-card companies, pressured by federal authorities who consider illegal the business estimated at $1.7 billion annually. Operators and supporters of marijuana dispensaries say banks are turning away their business because they risk falling afoul of anti-money-laundering and drug-trafficking laws. The largest U.S. bank, Bank of America Corp, said it started withdrawing services from dispensaries after receiving a warning from the U.S. Drug Enforcement Administration in late 2007 or early 2008.”
Three IEDs in DHS’ Actual Final Rules Detonate & Blow Many Would-Be Arizona Medical Marijuana Dispensaries Away
Let the litigation begin. The Arizona Department of Health Services had 120 days to create the rules to implement Arizona’s medical marijuana law. During that time DHS produced FOUR versions of its rules, but it saved its three improvised explosive devices until the 120th day. When the smoke clears from the DHS final rule bombs and allows would-be dispensaries to check their damage, many will find that they are too crippled to continue the race to the dispensary license finish line.
Today, the DHS submitted its final rules to the Arizona Secretary of State, but not without making three new rules that will prevent many would-be dispensaries from actually filing an application for a dispensary license. Here’s what DHS did:
The Zoning Comfort Letter Bomb
The first bomb is contained in new rule R9-17-304(D)(6), which reads: “To apply for a dispensary registration certificate, an entity shall submit to the Department the following . . . . Documentation from the local jurisdiction where the dispensary’s proposed physical address is located that:
a. There are no local zoning restrictions for the dispensary’s location, or
b. The dispensary’s location is in compliance with any local zoning restrictions
DHS issued the following FAQ on this issue:
“Do I need a certificate of occupancy from my city in order to apply? No, applicants do not need to submit a certificate of occupancy in the initial application. They must attest to meeting zoning requirements and provide documentation from the local government saying either there are no local zoning requirements or the location meets the requirements. However, if chosen as the dispensary for a specific CHAA, a copy of a certificate of occupancy or other documentation issued by the local jurisdiction will be necessary when requesting approval to operate the dispensary.”
The legal significance of this new rule is that the decision on which entity will get a dispensary license will be determined at the city or local zoning level. The rule does not give any guidance on what it means to be “in compliance with any local zoning restrictions.” Each local zoning authority will decide the conditions on which it will give its zoning comfort letter. The zoning authorities are able to give one comfort letter per CHAA if they so desire. Any would-be dispensary that fails to get a zoning comfort letter by June 30, 2011, is precluded from filing an application to get a dispensary license. Each local zoning authority is now free to determine who will get its zoning comfort letter. This new rule is an abrogation of DHS’ duty to select the qualified dispensaries and a shameful dereliction of its duty.
For a an actual example of how the cities are now able to select who will own a medical marijuana dispensary within their jurisdictions, see “Fountain Hills Faces Medical-marijuana Challenge.” Fountain Hills has only accepted one zoning application so no other would-be dispensaries will be able to operate in Fountain Hills. Result: Fountain Hills will determine who owns the dispensary in Fountain Hills, not DHS.
The Landlord Comfort Letter Bomb
New rule R9-17-304(D)(7 ) reads: “To apply for a dispensary registration certificate, an entity shall submit to the Department the following . . . . Documentation of:
a. Ownership of the physical address of the proposed dispensary, or
b. Permission from the owner of the physical address of the proposed dispensary for the entity applying for a dispensary registration certificate to operate a dispensary at the physical address;
DHS went backwards. The second draft of the rules created a nightmarish situation for prospective dispensaries because a large number of prospective tenants were all trying to enter into leases for a very small number of possible sites. The law of supply and demand made it impossible for most prospective dispensaries to find a properly zoned site and tie it up with a lease. This caused rents to soar way above market because the laws of economics applies to medical marijuana dispensaries and available rental space like it does to every other commodity. It was because of this hellish situation that I wrote an article on February 8, 2011, called “Prospective Dispensary’s Single Most Important Task Before May 30, 2011.”
Once again would be dispensaries will be engaged in a mad scramble to get a comfort letter from a landlord. Many will not be successful or will be successful only at great expense in time and money. Most landlords will demand real money to get a letter. Few will give away comfort letters. A commercial real estate broker who has been successful in getting leases for would-be dispensaries told me today that some landlords are demanding $5,000 to give a tenant a comfort letter for the purpose of getting local zoning approval. He also said that he has seen rents for dispensaries as high as $27 a foot, which is more than the going rate for class A office space in the Camelback corridor.
I predict that no prudent landlord will simply issue a comfort letter that satisfies the vague language in the new rule. I am a real estate lawyer and if I were advising a landlord and asked to draft a comfort letter that said the landlord will give the dispensary permission to lease the premises for a medical marijuana dispensary, I would put in language the makes it clear that the letter does not create a legal obligation on the part of the landlord to lease the premises to the dispensary. Without actually having a signed lease with the dispensary, every landlord should be concerned that a comfort letter does not obligate the landlord to lease the premises. I would also advise my landlord client to charge a substantial fee to get a comfort letter.
Query: If the landlords issue comfort letters that clearly state they are not binding on the landlord, then what is the purpose of requiring the prospective dispensaries to get the comfort letter? Maybe I’ve missed something, but the only reason I can see for this new requirement is to reduce the number of applicants for dispensary licenses and increase the applicants’ costs of doing business. Landlords once again have the upper hand which means the dispensaries will pay higher rents and the patients will pay more for their medicine.
The Bank Comfort Letter Bomb
Last, but not least, are new rules R9-17-302.A.5 and R9-17-304.D.1.f.ii. This last minute bomb was triggered by a question that should never have been asked of Will Humble last week at the April 5, 2011, forum in Phoenix. The first final rules issued by DHS on March 28, 2011, added a new requirement that said the dispensary application had to include:
“Documentation, from an in-state financial institution or an out-of-state financial institution, demonstrating that the dispensary has at least $150,000 available to begin operating was submitted with the dispensary registration certificate application.”
Unfortunately for many would-be dispensaries, a man asked Will Humble if it would be ok to deposit money in the bank, get the letter from the bank and immediately take the money out of the bank. Mr. Humble was visibly stunned by the question as he visualized a hole a mile wide in his capital requirement plan. Because of that question, RR9-17-304.D.1.f.ii requires the applicant for a dispensary license to submit “documentation that:
(1) Is from an in-state financial institution or an out-of-state financial institution;
(2) Is dated within 30 days before the date the dispensary registration certificate application was submitted; and
(3) Demonstrates that the entity applying for the dispensary registration certificate or a principal officer of the entity has at least $150,000 under the control of the entity or principal officer to begin operating the dispensary and has had control of the $150,000 for at least 30 days before the date the dispensary registration certificate application was submitted“
A client asked me the if Charles Schwab or Merrill Lynch are “out-of-state financial institutions? A.R.S. § 6-101 states that “Out-of-state financial institution means a state or federal bank, savings bank, savings and loan association or holding company with its home office in a state other than this state.” I don’t believe these types of institutions are banks or S & Ls, but could they be “holding companies?” I have no clue what the term “holding company” means. It appears, however, that a person who has sufficient assets in Merrill Lynch or a similar financial institution could not use that type of entity as an out of state financial institution for the purposes of this new rule.
This rule is outrageous, unreasonable, unfair and just plain wrong. Whether or not the reasoning behind the rule is good is something we could debate, but that is not my problem with the rule. I despise this rule because it is much too late in the process to issue the rule and simply not enough time for many prospective dispensaries to be able to comply with this new rule issued on the last day of the 120 days DHS had to finalize its rules.
The last day applicants may submit applications for dispensary registration certificates is June 30, 2011.
Note carefully requirement number 3. It could be a nuclear bomb! Either the entity applicant or A PRINCIPAL OFFICER OF THE ENTITY (whichever one actually has the funds) must show that it/he/she has had control of the $150,000 for at least 30 days before the dispensary application is submitted to DHS.
Bottom line: DHS may have just opened the litigation flood gates and may have cost the State of Arizona mega-millions in damages for promulgating unreasonable rules that have no basis in Proposition 203.
What do you think? What am I missing? Am I wrong. Add your comments below.
Recordnet.com: “Dispensaries run into difficulties dealing with financial institutions. Stockton and other local government agencies in California require medical marijuana dispensaries to promptly deposit cash into bank accounts. The federal government, meanwhile, is putting pressure on financial institutions to make that more difficult. Medical marijuana dispensaries throughout the state have been getting letters in recent months from their banks telling them their accounts are frozen or closed.”
Boulder Weekly: “Add one of Boulder County’s local financial institutions, Elevations Credit Union, to the ever-growing list of financial institutions that are refusing to do business with Colorado’s medical marijuana dispensaries. Elevations started sending letters to its commercial account holders in January saying that its “Member Due Diligence Program” requires identifying the nature of each of its business accounts. ‘With the growing number of medical marijuana dispensaries and related business,’ the letter says, ‘we must determine if your business provides any of the following services: Sale of marijuana, production of marijuana, storage of marijuana’.”
Question: I’ve formed my nonprofit entity and want to open a bank account in the name of the entity. Will my bank refuse to open an account because the business is growing and selling medical marijuana?
Answer: Maybe. If your entity has the word “marijuana” in its name, you may be dead in the water with many banks. Unfortunately, many banks and credit unions refuse to do business with a medical marijuana business. You may have to search to find a bank that is willing to open an account for your medical marijuana business.
In a May 20, 2010, letter six members of the U.S. House of Representatives asked Treasury Secretary Geithner to help solve the problem of banks refusing to do business with state legal medical marijuana businesses. The letter states:
“dispensary operators are finding it increasingly difficult to maintain accounts with financial institutions, due to what a spokesman for Chase bank called, ‘financial operational and compliance risk.’ Thus, it seems clear that legitimate state-legal businesses are being denied access to banking services, which does not serve the public interest. Among other concerns, the effects of this denial of service include: (1) an increased risk to public safety with potential theft or robbery that any cash-only or cash-reliant business faces; (2) a decreased likelihood that medical marijuana vendors will have the ability to accurately account for tax liability; and (3) an affront to fundamental fairness. since forcing businesses to operate with cash exposes the owners to greater legal risk under the Bank Secrecy Act.
we respectfully request that your office issue formal written guidance for financial institutions assuring that Department priorities do not include targeting or pursuing institutions whose account holders are involved in a business ostensibly operating in compliance with a state medical marijuana law.”
In a July 30, 2010 letter to Congresswoman Zoe Loftgren, the Office of the Comptroller of the Currency, Office of Thrift Supervision, Office of Thrift Supervision, National Credit Union Administration responded to the May 20, 2010, letter to Secretary Geithner and politely said the equivalent of the federal government couldn’t care less. Here’s the conclusion reached in the letter:
“The decision to open, close or refuse a particular account or relationship should be made by a depository institution without involvement by its supervisor. An institution must make its own assessment of whether or not to accept an account based on its business objectives, an evaluation of the risks associated with offering particular products or services to customers or members, as well as its capacity to effectively manage those risks.”