19 September 2016
On Nov. 8, voters will be on the edges of their seats awaiting the outcome of one of the most unusual and controversial presidential races in recent history. In some states, election drama will amplify with the consideration of another hot topic – marijuana legalization.
As of now, California, Nevada, Massachusetts, Arizona and Maine plan to include recreational marijuana use on voters’ ballots, potentially joining Colorado, Oregon, Alaska and Washington as states where the drug is legal for recreational use. Voters in Arkansas, Florida and North Dakota will consider legalizing medical marijuana.
Because the drug remains federally illegal, marijuana businesses must deny debit and credit card payments due to card companies’ fears they’ll be held liable for money laundering, with many of the businesses keeping ATMs onsite for customers. The Treasury Department permits financial institutions to do business with legal marijuana businesses under certain conditions, but it’s still difficult for these businesses to obtain loans, although some have managed to by putting up real property instead of inventory as collateral, The Cannabist reported this year.
Still, some credit unions have been brave enough to welcome marijuana business owners as members, including the $207 million Obee Credit Union in Tumwater, Wash., and the $1.5 billion Numerica Credit Union in Spokane Valley, Wash. It should be noted that for any institution that chooses to do business with the marijuana industry, the choice comes at a cost. Obee and Numerica had to hire more people to handle the extra work involved, including extensive application processes, additional account monitoring requirements, and substantial increases in SAR and CTR filings. For small credit unions without the resources to manage these responsibilities, avoiding the pot industry is an understandable move.
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