Week of July 23

July 24, 2018

In This Issue…

• Interesting marijuana development, at least for national banks
• OBA seminars scheduled on banking marijuana-related businesses
• Women In Banking conference scheduled for October
• Emerging Leaders lunch-and-learn scheduled
• OBA education corner …

Interesting marijuana development, at least for national banks

On Friday, we received a copy of an email written by our friend, Brian Wall, assistant deputy comptroller for the Oklahoma City Field Office in which he explained the OCC’s view on marijuana and what banks need to know. Our thanks to Ken Clayton at the American Bankers Association for clarifying this important issue.

“Brian pointed out something I did not know, and Ken (Clayton) confirmed it for me,” OBA President and CEO Roger Beverage said. “In a nutshell, Congress has prohibited the Department of Justice from spending any money to prosecute people for marijuana possession or use if it’s in line with state medical marijuana programs.

“This amendment is still in effect, but will expire on Sept. 30, 2018, unless the same language is included in the new omnibus bill. It’s likely it will not be stricken in the new amendment Congress will have to pass this year.”

Beverage said this same language is included in both the House and Senate versions of the new appropriations bill, but the rest of the respective bills vary wildly. Here’s a summary of the current state of affairs provided by Ken Clayton:

The FY2018 Omnibus includes DOJ prohibition language and is current law through Sept. 30, 2018.
H.R. 5952, Section 542 prohibits the Department of Justice from preventing certain states from implementing State laws regarding the use of medical marijuana.
S. 3072, Section 537, prohibits the use of funds by the Department of Justice to prevent states from implementing state laws related to medical marijuana.
Neither FY19 bill has passed their respective chamber.
With a CR seeming likely, FY2018 law will control and the prohibition on DOJ will remain in place.

So – what does that mean for you as a banker? Good question, but at a minimum it means you’re not going to be blindsided by a regulatory referral to the Department of Justice for prosecution if you “bank” any marijuana user or business.

Here’s what Brian said, which covers national banks:

“What we advise banks to do:

The decision to bank marijuana customers is a bank specific, risk-based decision that each bank will need to make.
Banks must understand and comply with state laws.
Banks must understand and comply with FinCEN guidance on SARs.
If you decide to bank these customers, the biggest risk to consider is BSA:
- BSA risk assessments, policies, procedures, and processes around high-risk customers, customer due diligence (and enhanced due diligence), and suspicious activity monitoring and SAR filing will need to be commensurate with the increased BSA risk from marijuana-related business accounts.
Contact your portfolio manager or Brian with specific questions.”

We think this appropriations provision protects both state-chartered and national banks in connection with medical marijuana programs only. The ABA is of the opinion it does not provide any protection for recreational marijuana (e.g., as permitted in Colorado and eight other states).

“I don’t necessarily agree with (the ABA opinion) on ‘marijuana states’,” Beverage said. “But that doesn’t matter in Oklahoma.

“Bankers need to be aware that possession of marijuana or financing the business of marijuana is still illegal under federal law. This amendment does not protect banks for anti-money laundering or bank secrecy act violations, or against general safety and soundness concerns related to managing this high-risk activity. If you comply with those requirements, then I think you’re home free as a practical matter. The amendment simply eliminates funding for prosecuting you or anyone else who follows state law for medical marijuana use.”

Beverage also noted Clayton has been hearing the same thing from the other federal banking regulators.

“… [t]his is consistent with the message we’ve been hearing from federal banking regulators generally: that they will be looking for compliance with the FinCEN guidance, strong BSA programs and thorough due-diligence from banks that have chosen to take on these accounts. Anecdotal information from banks across the country suggests examiners are taking an uneven approach to compliance, with some applying more scrutiny while others not so much.”

Please call us with any questions.

OBA seminars scheduled on banking marijuana-related businesses

With the above in mind, as you might imagine, we’ve had a number of calls from bankers asking us what the passage of SQ 788 means for their business. Specifically, several have asked us what they can and cannot do with respect to “banking” anyone in or associated with a business that operates in the chain of ultimately getting marijuana to Oklahomans for medicinal purposes.

Our Association’s general counsel, Mary Beth Guard, will be putting on a program next month outlining what it’s all about. “Preliminary Considerations for Banking MRB’s” (MRBs – Marijuana Related Businesses) will be held in Oklahoma City and Tulsa – click on each link below for more information and to register:

Tuesday, Aug. 7 — OBA’s Harris Event Center, Oklahoma City
Wednesday, Aug. 8 — Southern Hills Marriott, Tulsa

Women In Banking conference scheduled for October

Join the OBA in partnership with the Federal Reserve Bank of Kansas City and Community Bankers Association of Oklahoma for the second annual Banking and the Economy: A Forum for Women in Banking.

The Forum, set for Oct. 24 at the Embassy Suites in Norman, is designed to provide senior level and high potential middle management women bank leaders with industry, leadership and professional development knowledge that will enhance their careers and networks.

At #WomenInBankingOK, you will hear from top leaders in the banking industry about current economic conditions, banking, gender equity, FinTech, Tax Reform, and leadership strategies. Featured speakers include panelist Jill Castilla, president and CEO of the Citizens Bank of Edmond; Dr. Shirley Davis, president of SDS Global Services; Dionne King, CEO and strategic consultant of DMK Consults, LLC. and many more!

Don’t miss your chance to be part of this important conversation! Registration is $100. Please register soon, as previous conferences have sold out and space is limited.

If you know someone who would benefit from attending this conference, please feel free to share this invitation.

Emerging Leaders lunch-and-learn scheduled

Join your banking peers for a lunch-and-learn at the Oklahoma City Branch of the Federal Reserve of Kansas City. Lunch will be provided by the Fed, and there is no registration fee. Click here to register.

If you have any questions, contact Megan McGuire at the OBA at megan@oba.com or (405) 424-5252.

Details
Date: Friday, Aug. 17 at 11:30 a.m.
Location: Oklahoma City Branch, Federal Reserve Bank of Kansas City
Address: 211 North Robinson, Two Leadership Square, Suite 300, Oklahoma City, OK 73102

OBA education corner …

Summer is most certainly upon us and the beach and mountains are calling many of our names! If, however, more work-related pursuits are your idea of taking advantage of these months of the calendar, the OBA has you covered! Take note of the following:

Untangling the Web of Fee Disclosures, July 30, webinar — This webinar will help you untangle the intricacies of numerous fee disclosure requirements.
CRE Appraisals: Appraisal Components, Approaches to Value and Cap Rates, July 31, webinar — Fundamental principles and features and CRE appraisals are covered.
BSA: Opening Deposit Accounts for High-Risk Customers, Aug. 2, webinar — This webinar will focus on how to conduct the new account interview to obtain the nature, purpose and transactional questions to surface our high-risk customers.
Excel Explained: Budged Spreadsheets, Aug. 3, webinar — Excel features and functions that enable you to improve the integrity of your spreadsheets, transform filtering tasks, preserve key formulas, and more will be demonstrated.
Coaching Tellers to Excellence, Aug. 8, webinar — How successful do you expect your tellers to be? How successful do they want to be? How big is the gap between what you want and what they deliver?
Crimes Against Your Customers: Frontline Staff Training, Aug. 8, webinar — During this program we will conduct staff training to detect and prevent four big crimes against your customer.
Dealing With Casual Days, Dress Codes and Work Appearance, Aug. 9, webinar — This program will cover the practical and legal issues and the current trends in workplace appearance and what you should and shouldn’t do about it.
Three Key Risk Assessments in Your ERM Program, Aug. 14, webinar — This webinar will first take you through a basic review of what is ERM and the basic steps to develop strong risk assessments to address key areas of your institution.
2018 Loan Structure Documentation and Compliance, Aug. 15, Tulsa; Aug. 16, Oklahoma City — These full-day seminars will discuss loan structures for the bank.