PNC Bank is closing the accounts of the Marijuana Policy Project after an audit revealed that the organization received funding from a company that ‘touches the plant,’ according to a Washington Post report. MPP is not involved in cannabis cultivation or processing.
Nick Field, MPP’s chief operating officer indicated that a PNC Bank representative told him that the organization’s accounts would be permanently closed on July, 7. MPP has been banking with the institution since the group’s formation in 1995.
“They told me it is too risky. The bank can’t assume the risk,” he said in the report, adding that the bank’s concerns are overblown because the Justice Department has never investigated a bank for doing business with a state-approved cannabis business – let alone a not-for-profit advocacy organization.
“We are a registered 501(c)(3) and (c)(4). We have yearly audits,” Field said. “We are compliant with the IRS. It doesn’t get any clearer than that.”
PNC Bank did not comment on severing ties with the MPP but a spokesperson told the Post that “as a federally regulated financial institution, PNC complies with all applicable federal laws and regulations.”
In 2014, the Financial Crimes Enforcement Network issued a letter that was meant to clarify reporting requirements and provide clarity to the legal cannabis industry and financial institutions; however, in January a group of U.S. Senators said that guidance “did not distinguish between state-sanctioned marijuana businesses and the indirect businesses that service the marijuana industry,” leaving that decision to the banks and credit unions.
As of January, just 3 percent of the nation’s 11,954 federally regulated banks and credit unions have chosen to do business with the legal cannabis industry.