One of our bank prospects recently posed the question, “what do we do when our bank examiner-in-charge (EIC) says we should not bank cannabis?” We run into this question regularly and our answer is always the same. Speaking with your EIC early is something we recommend to all of our clients. As with the opening of any new line of business, your approach comes down to how you identify and measure the risks and what mitigating controls you put in place.
As financial institutions and their EIC know, FinCEN has issued specific guidance on cannabis banking. At Green Check, we have used this guidance as a set of rules for how our system operates in the real world. Demonstrating and exhibiting compliance of the operators and all of the activities that occur within each state-licensed cannabis business is what EICs need to be able to examine.
To date, financial institutions serving cannabis businesses have seen their examinations become more frequent and more complicated. This complexity is due to the additional level of scrutiny applied to these relationships, and the lack of readily available data to support the institution's ongoing compliance efforts. Our compliance management system aims to reduce these complexities, and provide a centralized platform to oversee the cannabis banking program. Getting your key stakeholders comfortable with how to create a structure for compliance - and how to intelligently enter this market space - is part of the education process for your institution.
We have created a framework for financial institutions to follow to ensure the development of a sound and compliant cannabis banking program. In addition, we’ve created a useful resource, Green Check and FinCEN Guidance, that explains how Green Check delivers the information needed for establishing and maintaining a true compliance platform for FinCEN and beyond.
We recently launched a 3-part webinar series, designed to address these issues and help institution’s develop or enhance their cannabis banking programs. You can listen to part 1, Cannabis Banking: Can I Do It?, and register for part 2 taking place on August 7th.