How to Get Started with Automating Your Cannabis Banking Program

Lori Moore, CRCM
|
October 28, 2019

During these past few months, there’s been quite a bit of news around cannabis banking. It’s only been a few weeks since the SAFE Banking Act passed the U.S. House, and it’s been about two months since the NCUA issued their formal statement on providing cannabis banking services. We’re starting to see the banking industry move towards more mature oversight practices when it comes to cannabis banking. Automation helps us answer how cannabis banking accounts can be managed. 

Last month, we wrapped up our three-part webinar series on Cannabis Banking. In Part one of our Cannabis Banking webinar series, we addressed the question “Can I Do It”? with special host and cannabis law attorney, Alan Hanson from Gleam Law. Alan discussed the existing dossier of documents and how they are a “must read” for financial institutions seeking to serve cannabis-related businesses (CRBs) and wanting to know more about the role financial institutions will play when it comes to banking cannabis. 


In particular, the 2014 FinCEN guidance contains a statement that is often overlooked. While the guidance provides clarification on how financial institutions can provide services to CRBs in a manner consistent with its BSA obligations, it further clarifies that “the decision to open, close, or refuse any particular account or relationship should be made by each financial institution based on a number of factors specific to that institution.”  


The regulatory agencies, including FinCEN, should not be expected to give you a definitive response as to whether your institution can or cannot provide services to CRBs. With that said, it’s worth noting that on July 22, 2019, the federal banking agencies in conjunction with FinCEN, issued a “Joint Statement on Risk-Focused Bank Secrecy Act/Anti-Money Laundering Supervision”, which reiterates statements in a previous publication issued in response to Operation Choke Point. Specifically: 


“Banks determine the levels and types of risks that they will assume. Banks that operate in compliance with applicable law, properly manage customer relationships and effectively mitigate risks by implementing controls commensurate with those risks are neither prohibited nor discouraged from providing banking services. As the federal banking agencies have previously stated, banks are encouraged to manage customer relationships and mitigate risks based on customer relationships rather than declining to provide banking services to entire categories of customers.”  


In other words, even when it comes to CRBs, this is a risk-based decision left to the discretion of each financial institution. What factors and risks - should you consider when determining if cannabis banking is right for your institution? 


Here at Green Check, we believe in a holistic approach; a 360-degree perspective and understanding of how the decision to serve CRBs will impact your institution.

In an earlier blog, Getting Your Examiner on Board with your Cannabis Banking Program - we explained how Green Check works to help you understand the risks related to banking CRBs and how our solution helps you manage these risks effectively using both preventative and detective controls as required by the FinCEN guidance. We understand banking cannabis is not a decision to be taken lightly, which is why we’re here to help.


Want to learn more about Green Check can help you? Our Compliance Team has developed a Cannabis Readiness Assessment tool to help you identify the current controls you already have in place to mitigate the inherent risks in banking cannabis. You can schedule your personalized readiness assessment here.

All Rights Reserved by Green Check Verified
Copyright ©2019