- The Office of the Comptroller of the Currency (OCC) is proposing adding cannabis and digital currency activities to the list of business data it collects from banks in an attempt to better identify areas of risk in the financial system, according to a notice the agency posted in the Federal Register on Wednesday.
- OCC-supervised banks are required to file an annual risk summary form (RSF), which collects data about different products, services, customers and geographies (PSCs).
- The OCC said it wants to add six new PSCs this year: cash transactions, marijuana-related businesses, ATM operators, crypto asset custody, stablecoin issuance and stablecoin payments. The regulator said it also plans to add three customer types under the money transmitters category: customers that accept or transmit crypto currency, crypto ATM operators and crypto asset exchanges.
The OCC’s proposal would put cannabis and crypto on a list of industries — such as casinos, liquor stores and check cashers — from which it already collects data.
“As new products and services are introduced, existing products and services change, and banks expand through mergers and acquisitions, banks' evaluation of money laundering and terrorist financing risks should evolve as well,” the OCC said in its notice.
The OCC said its money laundering risk assessment (MLR) is an important tool for its Bank Secrecy Act and anti-money laundering activities “because it allows the agency to better identify those institutions, and areas within institutions, that may pose heightened risk and allocate examination resources accordingly.”
“This risk assessment is critical for protecting U.S. financial institutions of all sizes from potential abuse from money laundering and terrorist financing,” the regulator said.
The OCC’s proposal also deletes four existing categories: boat/airplane, bulk cash/currency repatriation customers, bulk cash/currency repatriation and international branches.
The agency will collect comments on the proposal until Aug. 8, it said.
The MLR sheds light on products or customers that may be experiencing difficulties or challenges maintaining banking services, the OCC said.
Cannabis’ designation as a Schedule 1 drug under the Controlled Substances Act and crypto’s connections to money laundering have caused many banks to refrain from banking the two emerging industries.
Banks that choose to service cannabis businesses are already required to file suspicious activity reports (SARs) with the Financial Crimes Enforcement Network (FinCEN).
A total of 755 institutions — 553 banks and 202 credit unions — were banking cannabis-related firms as of Sept. 30, up from 723 outlined in FinCEN’s June 2021 report.