Get Prepared for the Cannabis Industry
To Bank, or Not to Bank Cannabis-Related Businesses
As of January 1, the laws around cannabis have changed in Illinois. Whether you plan to do business with the cannabis industry or not, you need a plan and the people power to execute it. Are you ready?Talk to a specialist
Chose to Bank CRBs
- Customer due diligence (CDD) is key; Know your customer, including beneficial owners, and the full scope of their business(es).
- Ongoing monitoring and enhanced due diligence (EDD) is critical to ensuring all transactions are legitimate. Balance anticipated activity (particularly cash) with actual activity.
- Go for that fee income! Use account analysis as well as a monthly fee for the heightened risk and monitoring costs you will incur.
If you want to Avoid Banking CRBs
- Update your BSA/AML policy to include that your financial institution will not “knowingly” provide services to these customers to exit the relationship if discovered without breaking policy.
- Perform CDD. Ask if the customer is involved in any type of CRB. Put the responsibility on the customer to be honest.
- Use ongoing suspicious activity monitoring for cash volumes and other activity that doesn’t fit the customer’s line of business.
Cannabis Law in Illinois
USDA Approved Hemp Plan
Illinois has submitted their state-specific plan for hemp growers to the USDA.
This was created by the Illinois State Treasurer’s office to allow financial institutions to provide basic banking services to CRBs.CANNABIS BANKING SERVICES PROGRAM
Verify a customer is in fact a state-licensed dispensary and lawfully able to operate in the state of Illinois.
Solutions and services to help you clear the smoke.
With BAM+ CRB Scenarios, your transactions will be scanned weekly against four different scenarios intended to alert you to potentially suspicious activity resulting from unidentified CRBs/MRBs. It will work both as you onboard new relationships and monitor existing ones to avoid any unpleasant surprises down the road.
CRB WATCHLIST SCANNING
Experts expect there to be almost 300 cannabis stores in operation in Illinois by 2022. Do you really know your customers/members as well as you think? Could you be banking a CRB or MRB without knowing? Our CRB watchlist scanning, part of BAM+ Scan, allows you to use the power of NominoData to scan against state-licensed cannabis dispensaries, ensuring you truly know who you're banking.
CRB POLICY AND PROCEDURE REVIEW
Whether your institution has decided to service, or not service, CRBs/MRBs, you need to update your policies and procedures to reflect that decision. How are you actively monitoring to ensure you don't unknowingly have a CRB hidden in your customer base? Our Advisory Services team can help make sure you stay in compliance.
SUSPICIOUS ACTIVITY MONITORING
No matter whether you decide to bank or avoid CRBs/MRBs, there is an increased, and often unexpected, amount of diligence and monitoring your BSA department is tasked with. Our Advisory Services team can help act as an extension of your BSA department for a long-term assignment or short-term help so you don't skip a beat.
Marijuana Related Businesses (MRBs) or Cannabis Related Businesses (CRBs) continue to pose heightened risks for financial institutions.
With the new banking cannabis changes in Illinois, the question arises “is your financial institution ready to provide services to these businesses?”
Whether or not your institution wants to successfully take on these risks or not, learn how to safely bank or take measure to avoid MRBs/CRBs.
Hear from a panel of current BSA executives that are successfully providing services to these businesses or that are successfully avoiding this risk.