Since the plant is still federally illegal, most federally-insured banks won’t go near the sector for fear of being penalized for money laundering.
“I personally think that’s usury.
The fees are intended to help cover extra costs associated with serving cannabis businesses, such as the expense of performing risk assessments and fulfilling regulatory requirements.
Smith objected to comments on social media characterizing the fees as “profiteering,” noting that the bank has adjusted the schedule to include a reduced fee for the smallest tier of cultivators after receiving feedback from applicants.
“We’re serving these businesses because we believe that they’re legitimate at the state level and they should have access to banking,” Smith said.
So far, NEFCU is the only Vermont bank actively opening accounts for adult-use cannabis clients.
The credit union is preparing to begin opening accounts for adult-use cannabis applicants soon, but only if they have a pre-qualification from the state in hand, according to Gregory Huysman, director of business lending and services.
Pre-qualification entails a criminal background check and a review of principals and controlling entities in the business.
NEFCU and VSECU have also announced their intention to merge, but this process is not expected to be finalized until well in 2023.
Until then, the two credit unions will maintain their distinct policies, procedures and fee schedules, according to Huysman.
Kristyn Glennon, a vice president and Bank Secrecy Act/anti-money laundering officer for Bay Coast Bank in Massachusetts, said it’s not uncommon for banks in the state to charge fees for cannabis deposit accounts, whether they be flat or percentage-based.
What Sparks would like to see is more transparency around what the fees are going toward.
“I guess in some sense, I don’t mind paying a small fee.
The SAFE Banking Act, which would keep federal regulators from penalizing financial institutions that work with cannabis establishments, is stalled in the U.S.
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