The National Credit Union Administration (NCUA) recently published an administrative order against Live Life Federal Credit Union, a small federal credit union based in Michigan. The order states NCUA believed there were grounds to initiate a cease and desist action, and that Live Life – which wished to avoid the “time, cost, and expense” of administrative litigation – consented to the cease and desist order without admitting to any compliance violations or other grounds the NCUA believed to exist. While the order does not provide any specific factual allegations, the actions it requires Live Life to take could hint at possible deficiencies found by regulatory examiners.
Some context could be helpful here: In 2018, Michigan voters legalized marijuana for recreational use. NCUA’s cease and desist order instructs Live Life to take a number of actions regarding their marijuana relates business (MRB) programs and policies, hinting that NCUA may have found deficiencies with Live Life’s compliance regarding that topic. This is notable, as it is the first NCUA enforcement action regarding marijuana related businesses (MRBs) and shows NCUA will be taking a serious look at MRB policies, procedures and practices during Bank Secrecy Act (BSA) examinations.
Serving MRBs can be complicated. Even though marijuana has been legalized at the state level for medicinal or even recreational use in a growing number of states, marijuana remains a schedule I drug under the federal Controlled Substance Act, meaning possession, cultivation, sale or other activities relating to marijuana remain illegal at the federal level.
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