ST. LOUIS — Triad Bank, one of the few banks in the country providing services to marijuana companies, provided insights into its operation at a conference this week in St. Louis, including its use of armored cars to transport the large amounts of cash generated by the businesses.
Triad, which began serving marijuana businesses last year, previously had refused to discuss the topic after Federal Reserve regulators cautioned it not to because marijuana remains illegal under federal law, CEO Jim Regna told the Business Journal.
Here are some of the highlights from Regna's presentation to about 50 people during a breakout session at the two-day Missouri Cannabis Trade Association convention at Union Station:
- To handle deposits in what is almost entirely an all-cash industry, Triad uses an armored-car service to transport money from the marijuana businesses to the Federal Reserve. The bank would not be able to handle the large amounts of cash at its single branch in Frontenac, Regna said.
- Though major credit card companies refuse to service dispensaries or other marijuana-related businesses because of the legal risk, Regna said Triad offers marijuana customers access not only to depository services but to all of its other services, such as loans and treasury management.
- Triad limits marijuana-related deposits to 20% to 25% of its total deposits. Its deposits totaled $293 million as of June 30, the Federal Deposit Insurance Corp. reported. The limit is self-imposed and varies among banks with marijuana clients, said Bart Stanley, a review examiner at the Missouri Division of Finance, who also spoke at the conference.
- Triad monitors all marijuana customer accounts for irregularities. "We will look at your account daily and file a report every 90 days," Regna said. "If you write a check for more than $5,000, we need to see where that's going."
- In the case of any irregularity, the bank files a Suspicious Activity Report with the U.S. Treasury. If irregularities are serious, "We will ask you to leave," Regna said. Triad, which has one full-time compliance officer, previously said it had hired a software company, Integrated Compliance Solutions in Las Vegas, to do the voluminous paperwork required.
- Correspondent banks — banks that serve other banks — often refuse to work with financial institutions that serve marijuana clients. "Every bank has a bank, and we had to get a new correspondent bank," Regna said.
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