U.S. Eagle FCU Is Nation's First to Receive Certification to Serve Pot Businesses
State/Federal agencies accept the certification model as the compliance standard, as well as for applying risk-mitigating strategies.
New Mexico Attorney General Hector Balderas said Monday that the $1.3 billion U.S. Eagle Federal Credit Union earned a certification in safe monetary banking protocols that establishes high levels of compliance standards and risk-mitigating strategies for banking cannabis and hemp businesses.
According to Balderas, the Albuquerque-based credit union became the first financial institution in the nation to receive this certification.
“The marijuana industry will soon be exploding in New Mexico, and it is important to have banking safeguards to mitigate illicit and criminal conduct,” he said in a prepared statement. “This is an important first step in partnering with legally compliant businesses in the marketplace.”
Adult recreational use of marijuana officially became legal in the state on June 29, but retail pot sales are not expected to begin until April 2022, according to New Mexico’s Cannabis Regulation Act, which was passed by the state legislature in March. Gov. Michelle Lujan Grisham signed the bill on April 12.
Balderas said the overall certification model is accepted by state and federal agencies as the standard of compliance and in implementing general risk-mitigating strategies. In collaboration with state attorneys general, the certification program is overseen by the Policy Center for Public Health and Safety, a Littleton, Colo.-based non-profit group that addresses cannabis challenges of financial institutions, investors, operators, regulators and law enforcement. This initiative also is part of a broader certification effort implemented by ASTM International in West Conshohocken, Pa., a not-for-profit organization that develops voluntary consensus standards to determine the legal and regulatory framework for marijuana use.
“Credit unions were chartered to serve the unbanked and underserved population. The cannabis industry has been unbanked and underserved for years, often resulting in adverse impacts on public safety in communities where cannabis is legal,” U.S. Eagle President/CEO Marsha Majors said in a prepared statement.
The certification process helps organizations achieve the highest level of compliance standards that will meet the expectations of BSA and FinCEN guidelines, mainstream depository options for cannabis-related entities, including both plant-touching and ancillary service providers. The certification also ensures accountability, transparency and reporting of the industry, as well as management of internal activities of personnel involved to ensure full compliance with processes. Furthermore, the certification standards require organizations to keep track of cannabis clients to ensure they are internally prepared to prevent or implicate any enforcement priorities previously recorded in the Cole Memo and FinCEN guidelines.
According to Balderas, the certification accomplishes the following: Helps create an open environment of all activities with examiners, auditors and other third parties that work with financial institutions; increases transparency by digitizing financial transactions to the highest level possible; ensures records are thorough, easily navigated and readily available to fulfill law enforcement demands; and establishes a network of financial institutions that serve the cannabis industry to share and develop best practices.