PORTLAND, Ore.–The subject often draws snickers, but it’s an increasingly serious business–what is a credit union to do if it needs to retrieve “collateral” from a marijuana-related business that has failed?
While state law in Oregon and Washington has changed to largely make marijuana legal, it is illegal under federal law. And that creates potentially big problems for credit unions.
“We want to set up a receivership in which a licensed marijuana business would be able to take (that collateral) into receivership, sell it out, and give the cash back to the credit union,” said Linda Jekel, Washington’s state regulator. “We do believe you can make safe and sound loans to a marijuana business.”
Oregon’s state regulator, Janet Powell, who joined Jekel on a panel at the Northwest Credit Union Association’s Amplify meeting, said her state is still looking at some controls around how credit unions can do business with marijuana-related businesses.
“From the standpoint of a credit union that accepts deposits, we are looking for a policy that the board has approved and that they realize it is still illegal as far as the federal government is concerned,” said Powell. “We also want the credit union to understand the new account process opening, what is the reporting, what is the cost and fee analysis for doing this, and is the credit union doing due-diligence on these businesses. How does the CU ensure themselves that the Fincen and Cole Memo requirements are being met?”