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#2202128 - 01/04/19 09:52 PM Banking Marijuana
Anonymous
Unregistered

Our bank is looking at banking marijuana. I was wondering if there is anyone out there banking it and what repercussions you have had?

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#2202143 - 01/07/19 01:41 PM Re: Banking Marijuana Anonymous
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,402
You might give a little more information. Such as medical vs recreational and which parts are legal in your state.

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#2202156 - 01/07/19 03:36 PM Re: Banking Marijuana Anonymous
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,191
New York City
We looked at it and determined that the cost for the upfront and ongoing DD wasn't worth it. I know some Banks that do it, but they either have the staff to handle this type of project or hired a consultant to set up their program. PM me if you would like to discuss further.
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"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#2202308 - 01/08/19 04:44 PM Re: Banking Marijuana Anonymous
Anonymous
Unregistered

We looked also, and briefly salivated at the potential fee income. I spent a good 10 hours preparing for it, but then at the next board meeting when it was mentioned briefly, just in passing, to our fearless leader/chairman/head honcho, he flat-out refused in no uncertain terms: No way, never!

So, if, like us, you are at a closely-controlled bank subject to the direction of one person or a small group of people, then before you spend a great deal of time figuring out whether it's possible and safe to do this type of banking, and how to answer middle management's questions on this, you might suggest that they ask THEIR boss what he or she thinks of it, and save yourselves considerable time and expense.

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#2202322 - 01/08/19 05:19 PM Re: Banking Marijuana Anonymous
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
A credit union in my state is only one out of two FI's banking them (or maybe the only one) and the CEO of the CU has been quoted in many industry articles stating they did at least a years worth of due diligence and hired attorneys before making the decision to bank them. I don't have the time or the staff to spend all that time researching this matter

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#2202325 - 01/08/19 05:29 PM Re: Banking Marijuana Anonymous
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,322
Illinois
There is another factor. Some of my clients have explored it as an option and are then told by their correspondents that the correspondent will close their account and not process any more wires for them if they elect to bank the industry.
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#2204496 - 01/30/19 06:56 PM Re: Banking Marijuana Anonymous
Anonymous
Unregistered

Thanks for the input. Both medical and recreational marijuana is legal in our state. The direction from the CEO is definitely moving forward with banking marijuana and sooner rather than later. Trying to put the brakes on that until all the information can be obtained and weighed.

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#2204504 - 01/30/19 07:30 PM Re: Banking Marijuana P*Q
GuitarDude Offline
Power Poster
GuitarDude
Joined: Nov 2004
Posts: 5,924
So Cal
Originally Posted By P*Q
A credit union in my state is only one out of two FI's banking them (or maybe the only one) and the CEO of the CU has been quoted in many industry articles stating they did at least a years worth of due diligence and hired attorneys before making the decision to bank them. I don't have the time or the staff to spend all that time researching this matter


And that is only the time and resources spent on the front-end... eek
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I've just writed a wrong.

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#2204512 - 01/30/19 08:56 PM Re: Banking Marijuana Anonymous
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
Right?????

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#2204672 - 01/31/19 10:22 PM Re: Banking Marijuana Anonymous
Snowgirl Offline
Platinum Poster
Joined: Sep 2003
Posts: 711
It is legal in our state as well both medically and recreationally. We do not bank MRBs, but wondering what others are doing if an employee of an MRB wants to open an individual account at your bank? Or if you have a large mall and one of the stores within the mall is rented to an MRB? Or an accountant that may be doing the taxes for an MRB? Or a garbage service that may pickup the garbage for an MRB? An electric company that provides electricity to an MRB? How far down do you have to drill down and not bank them. The list could go on and on. How do you address these types of relationships in your BSA Policy? Would you file SARs on them if you knew they were the CPA for that marijuana company, etc? Would you close their account or refuse to open an account for them?

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#2204674 - 01/31/19 10:55 PM Re: Banking Marijuana Anonymous
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,657
The Country
We do not drill down very far and it really is based on the type of activity. For example, if we do hit one or two levels removed it is only because of the large amounts of cash involved. Otherwise you are just chasing your tail. Like you mentioned, do you report Home Depot because they sell gardening soil and such to a growing facility?
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A successful man is one who can lay a firm foundation with the bricks others have thrown at him.
-David Brinkley

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#2204762 - 02/01/19 05:05 PM Re: Banking Marijuana Anonymous
mtngrrl Offline
Gold Star
mtngrrl
Joined: Mar 2011
Posts: 471
Northern California
It comes down to the fact that your institution has to evaluate the risk and establish a policy that states how far you'll go. It's not probably reasonable to state that you won't bank the power company that supplies electricity to growers. When you get closer to the line - banking the dispensary, banking the employee of a dispensary, banking the executive director or the owner of a dispensary...then you need to start thinking about the risk level and how much due diligence do you need to perform on that customer.

We are FDIC regulated (San Francisco region), and we were able to have a meeting with a regional Special Activities Case Manager who is extremely involved in MRB issues. It was clear that the FDIC was willing to work with us to help us understand the all the risks - regulatory, financial, reputational, etc. If you are SF FDIC, feel free to PM me and I will give you some contact information.
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Be kind; everyone you meet is fighting a hard battle.
--all opinions are my own--

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