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Federally Regulated Banks Begin To Work With States' Pot Businesses


We've been hearing a lot about how hard it is to do banking when the business is selling marijuana.


Even though in 23 states, medicinal marijuana is legal.

MONTAGNE: Even though in Colorado and Washington, anyone can buy it without a prescription.

GREENE: That's because big banks have been wary about dealing with these businesses since dealing in pot is still a federal crime.

MONTAGNE: And banks, they have federal regulators. From NPR's Planet Money podcast, Steve Henn tells us that is finally beginning to change.

STEVE HENN, BYLINE: Most medical marijuana dispensaries get around their banking problem by opening what they call a backdoor bank account. Basically, they just don't tell banks what kind of business they're in. Daniela Bernhard had one of these accounts. But making a big cash deposit was awkward.

DANIELA BERNHARD: So what I would do is I'd be very polite and say it's a great day or whatever. And then I pull out my smartphone and start conducting business and be a little bit rude.

HENN: So you use your smartphone as a shield to prevent me from being like, oh, wow. This is a lot of cash. Did you have a bake sale?

BERNHARD: (Laughter) I'm a busy woman, and you are not going to interrupt me with chitchat.

HENN: But dealers are now being welcomed in the front door. Three tiny credit unions in Washington state have said they're willing to deal with people like Bernhard. Carmella Houston still remembers the day her little bank, the Salal Credit Union in Seattle, decided to OK its first equipment loan for a cannabis processor.

CARMELLA HOUSTON: Our first loan that we made to the industry, we actually booked while our federal and state regulators were in-house doing their annual exam.

HENN: That loan was for a $400,000 piece of equipment that's used to extract oils from marijuana leaves. Those oils make edible products, like brownies and cookies, possible. Now this borrower was an excellent customer. He had great credit, good collateral, strong cash flow. But the bank examiners, they were a little taken aback, especially the feds.

RUSS ROSENDAL: They were a little bit more concerned because this had been the first one and evidently, they didn't think that people were ready to do this yet.

HENN: Russ Rosendal is the CEO of this tiny little credit union.

ROSENDAL: We just told him, well, this is - you know, we've been up front. We've gotten no pushback, and we're going to move forward.

HENN: There were calls back to Washington, D.C., a lot of back and forth. But in the end, the loan went through. It may have been the first legal bank loan ever for a piece of marijuana processing equipment. Still, in this industry, even something as simple as opening a business banking account isn't easy. Carmella Houston walked me through it.

Wow, that's a thick stack of papers. How many pages is that?

HOUSTON: Well, some of this isn't - there's two pages of information. And then we have a checklist of documentation that we ask them to provide, which is quite long.

HENN: There are essay questions, detailed business plan requests, background checks and the questions just keep coming.

HOUSTON: Armed guards or guard dogs? The answers to those two questions should be no. The state of Washington does not allow an armed guards or guard dogs in any licensed location.

HENN: So in some sense, this is like quiz.

HOUSTON: (Laughter).

HENN: And there's good reason Houston so careful. Her boss, Russ Rosendal, says the stakes are high.

ROSENDAL: There are no guarantees. I mean, we can be doing everything perfectly according to the regulations that have been set up by the state. But the feds could still come in and investigate us and, you know, potentially charge us.

HENN: So to date, they've talked to 300 people and opened fewer than 30 accounts. Steve Henn, NPR News. Transcript provided by NPR, Copyright NPR.

Steve Henn is NPR's technology correspondent based in Menlo Park, California, who is currently on assignment with Planet Money. An award winning journalist, he now covers the intersection of technology and modern life - exploring how digital innovations are changing the way we interact with people we love, the institutions we depend on and the world around us. In 2012 he came frighteningly close to crashing one of the first Tesla sedans ever made. He has taken a ride in a self-driving car, and flown a drone around Stanford's campus with a legal expert on privacy and robotics.