An independent federal agency cited a Michigan credit union for failing to comply with marijuana banking regulations and ordered the financial institution to stop opening new cannabis accounts.
American Banker reported that the case involving Live Life Federal Credit Union is believed to be the first time U.S. regulators have publicly penalized a financial institution that handles cannabis accounts. But that couldn’t be immediately verified.
The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury, issued requirements to financial institutions about monitoring and reporting suspicious activity such as possible money laundering.
Live Life is based in Fraser, roughly 20 miles north of Detroit, and has about 150 cannabis customers.
According to the order, Live Life waived its right to appeal and agreed to take the following actions:
- Immediately cease opening new marijuana accounts and suspend transactional activity on certain existing accounts.
- Implement an automated system to effectively monitor, identify and file suspicious activity reports in accordance with FinCEN regulations.
- Engage a third party to validate compliance.
Live Life CEO Karla Haglund acknowledged to American Banker that the credit union had a manual system and missed or filed some suspicious activity reports late.
“The cannabis atmosphere is very fast-paced,” Haglund said. “It can be very draining for staff.
“You have to work a lot of hours, so we had slowed the program down anyway.”