Summit Recap – Frank Drake
Attendees at last week’s Summit were able to gather a lot of good information from our breakout sessions. In particular, Frank Drake spoke on two timely but completely different topics that drew good attendance – “Reefer Madness” Meets Modern Business: Credit Union and the Rise of Cannabis Banking, and in the afternoon, A Foolproof Board of Directors.
Mr. Drake provided an update on the patchwork of state legalization of cannabis – ranging from medically allowed to recreational and the six remaining states that still fully outlaw cannabis. This cash intensive industry seeks to gain access to legitimate banking services, and some banks and credit unions have stepped up to fill this void. Discussion included a review of Department of Justice (i.e. the “Cole Memo”) and FinCEN guidance.
Photo: Frank Drake and Amy Kleinschmit at the Summit.
Frank stressed the importance of signing up for FinCEN 314(b) information sharing whether or not marijuana related businesses or hemp related businesses are served. Some of the benefits of participation in 314(b) information sharing include access to additional information for initial account opening, member due diligence and ongoing due diligence requirements.
Touching on hemp, Mr. Drake reviewed some guidance previously issued from NCUA including the requirements to have a clear understanding of state, local, and tribal restrictions/regulations regarding hemp production to ensure the business being served is compliant. Member Due Diligence must be carefully and thoroughly completed.
Finally, Frank concluded with fourteen “ingredients of a defensible MRB/HRB banking services policy,” reminding attendees that no one is disciplined for being over-compliant.
Shifting gears, Frank Drake’s second breakout session was targeted on a “foolproof” board of directors. Frank provided information that board of directors need to know to do their job, follow the law and to avoid the risk of personal liability. Frank reminded attendees that the real job of the board of directors is credit union governance, not credit union management. He emphasized that board of directors need to speak with one voice – members welcome opinion diversity but must abide by group decisions.
In this breakout session, attendees reviewed common sins committed by board of director members. For example, one common sin that Frank discussed was failure to attend and to actively participate in board of director meetings. Another sin – board members who invoke their position to obtain special advantage.
For both breakout sessions, Frank developed detailed outlines to cover the information provided. Any attendee who would like to receive the outline and/or PowerPoint presentations can receive the information by email request to firstname.lastname@example.org.
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