Are Banks Reporting State Governments To Uncle Sam For SARs?

Are Banks Reporting State Governments To Uncle Sam For SARs? by Bipartisan Policy Center

The Bank Secrecy Act (BSA) requires banks to file reports when they suspect their customers of making transactions using money derived from illegal activities. But what if the customer is a state government? That might seem impossible, but consider what happens when a state government deposits tax revenue obtained from marijuana businesses operating legally under state law, but illegally under federal law.

While the law is unclear, it seems banks might need to file suspicious activity reports (SARs) to the federal government on states depositing revenue that contains taxes paid by marijuana sellers. This raises key questions about the functioning of the current BSA framework:...