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The state of New York is encouraging state-chartered banks and credit unions to establish banking relationships with with fully compliant medical marijuana-related businesses.

New York Gov. Andrew Cuomo issued a statement earlier this month directing the state’s Department of Financial Services to provide guidance to support the safe and sound provision of banking services for these businesses.

While medical and recreational marijuana is legal in many states, it remains illegal at the federal level. Most financial institutions have avoided doing business with the industry, concerned they might run afoul of Bank Secrecy Act and anti-money laundering laws.

“The ability to establish a banking relationship is a challenge that legal industries face unlike no other,” Cuomo said in the statement. “As the federal government continues to sow discord surrounding the medical marijuana and industrial hemp businesses, New York has made significant progress in creating a supportive economic development and regulatory landscape for these companies.”

Furthermor, DFS advised New York’s chartered institutions that it will not impose any regulatory action on any New York state-chartered bank or credit union for establishing a banking relationship with a New York medical marijuana-related business, as long as the institution complies with the requirements of:

  • The 2014 Financial Crimes Enforcement Network guidance.
  • The guidance and priorities set forth in the Department of Justice’s 2013 memorandum from Deputy Attorney General James M. Cole.
  • Is subject to the institution’s own evaluation of the risks associated with offering products and services and its ability and systems to effectively manage those risks – as all DFS-regulated institutions do with regard to all their banking relationships.

“DFS stands ready to work with our chartered institutions to assist them in moving forward towards helping New York’s medical marijuana and industrial hemp businesses operate in a safe and sound manner,” Financial Services Superintendent Maria T. Vullo said in a statement. “New York’s financial institutions should provide banking services to these legal businesses, in accordance with established principles and procedures, including customer due diligence and transaction monitoring. In this way, New York’s businesses can operate more effectively under the law to serve New Yorkers.”