By Donya Parrish, MCU VP- Risk Management
In a blog post last December, I talked about the importance of your credit union having a board-approved policy on serving the marijuana industry. The topic continues to come up on the compliance hotline, so I wanted to address a couple of additional issues and considerations.
It is common for credit unions to try to draw a line in the sand and say they will not serve medical marijuana dispensaries. Unfortunately, it is not that easy and a lot of “gray areas” exist. Getting requests from actual dispensaries does happen, but the more difficult challenge lies in the ancillary businesses. Ask yourself a few of these questions, and then look back to your board-approved policy to see if you have given direction or flexibility to management when they encounter these scenarios — because they are being seen at credit unions every day.
- Will you serve employees of dispensaries and MRBs (marijuana-related businesses)? If so, does that include just deposit accounts or loans as well? Would your reaction change if the employee were only paid in cash and could not prove income?
- What steps will be taken if your credit union discovers you already hold an MRB account (whether you were intentionally lied to or just didn’t realize the nature of their business when it was opened)?
- What if an employee of the dispensary is running some business through their personal account?
- Do you serve landlords and property owners who lease to MRBs?
- If you hold business accounts, is there a percentage of their business involvement with MRBs that might preclude you from serving them? Many dispensaries depend on ancillary businesses for things such as electrical work, signage, labeling, packaging, soil, seeds, consultants, and more. Are you asking at account opening about whether these kinds of businesses serve MRBs?
- If you do serve the industry, does your credit union have an exit strategy if laws or regulations do not change favorably?
As you can see, marijuana banking is a complex issue, and it’s getting more complicated as the industry grows and expands. I urge credit unions to have this discussion at your board meetings and keep up on not only the credit union’s policy, but also on requests your credit union has received and activity in the community that could impact your risk profile. I am always available if you want to talk about it from a compliance perspective, so contact me if I can help.