Shield Compliance
Jenna Meyer, Director of Client Success

3 Questions with Jenna Meyer

A chief concern we hear from banks and credit unions is that cannabis banking is much more intrusive than what a typical business banking relationship requires. They’re also uncertain about how they can manage compliance without sacrificing customer service. Here’s an overview of what financial institutions can expect when it comes to compliance requirements and how they can offer a collaborative experience with the cannabis-related businesses (CRBs) they serve.

1. Why is additional due diligence required to serve CRBs?

Banks and credit unions serving this industry must comply with a patchwork of state regulations, as well as guidance from the Financial Crimes Enforcement Network (FinCEN) to ensure that money going into and out of the CRB is from legal channels and that financial institutions are only banking legal funds. This due diligence includes:

  • Verification that the CRB is duty licensed and registered.
  • Review of the license application.
  • Obtaining information about the CRB and related parties from the state licensing authority.
  • Understanding the normal and expected activity of the business.
  • Monitoring for negative news about the CRB and related parties.
  • Monitoring for suspicious activity.
  • Refreshing customer information on a periodic basis.

2. How can financial institutions manage compliance while delivering exceptional service?

Shield works closely with its banking clients to ensure their customer or member experience is as frictionless as possible. Our BSA/AML compliance platform can be integrated with the most commonly used accounting platforms and makes it easy for data to be requested and supplied in a secure fashion. Shield is a Validated Integrator with Metrc, so we can automate many data collection processes without requiring any manual intervention.

Shield also facilitates the conversation between the CRB and the banker, allowing multiple people on the team to work together on compliance. If there’s an issue, the financial institution can explain why something may not comply with its policy while allowing the CRB to provide justification or additional information. This helps the CRB understand that there’s room to work with the financial institution to address concerns as they arise.

3. How do changing regulations impact banking relationships?

Shield continually monitors the industry regulations and seeks feedback from its clients to ensure any regulatory changes (or examiner requests) are reflected in its software. For example, if a specific financial institution's examiner wants it to focus more on accounting data or more on seed-to-sale data and adding in their taxes information or non-plant touching sales, our banking clients have the option to configure the system and request exactly what they need to get from the CRB.

As cannabis becomes legalized in more states and eventually at the federal level, it’s hard to imagine that oversight of the industry will go away completely. Understanding how compliance and customer service can go hand in hand is critical to building long-term relationships with CRBs.

Learn more about Shield's Cannabis Banking Solutions › 
Shield continues its rapid growth trajectory, achieving more than 220% year-over-year revenue growth in 2021 and more than doubling the number of financial institutions on its platform. These institutions collectively serve more than 2,300 cannabis-related businesses (CRBs), a nearly 250% growth. We also expanded our footprint with new clients in Maine, Missouri, New Mexico, Oklahoma, Oregon, and Puerto Rico.
To facilitate the delivery of financial services to CRBs, we continue to enhance our flagship BSA/AML compliance solutions: Shield Assure for daily monitoring and reporting; and Shield Engage for client application processing, underwriting, and onboarding. We also introduced Shield Force, a service offering for financial institutions requiring additional compliance staffing support to maintain or expand their cannabis programs.

The team at Shield Compliance understands the complexity of the cannabis industry and offers the solutions and a cost structure that improves our competitiveness. Shield offers the reliability and flexibility required to serve CRB customers effectively.

William Hufnagel, President and CEO
Dart Bank
Cannabis Banking Playbook
Download Our Cannabis Banking Playbook

Today some form of medical or adult-use marijuana is legal in 37 states and the District of Columbia, representing upwards of 95% of the U.S. population. With numerous examples of successful retail programs to draw from, states are hitting the ground running. Informed by the experience of pioneering bankers, Shield’s cannabis banking playbook defines a path forward for financial institutions to serve the cannabis industry compliantly, without sacrificing the customer or member experience.
Todd Gunderson, Credit Union 1
"Meet the Cannabis Banker"

When the Illinois legislature legalized adult-use cannabis in 2019, state leaders embarked on a campaign to encourage local banks and credit unions to provide banking services to this emerging industry. Following a meeting with the State Treasurer and months of careful due diligence about the industry, the risks involved, and how to serve it compliantly, Credit Union 1 CEO Todd Gunderson and his board made the decision to launch a cannabis banking program in January 2020.

Read our interview with Todd about his experience serving this industry and why cannabis banking makes good business sense.
Neil Rosenfield, Baker Tilly
"Meet the Expert"

Just in time for Tax Day, we asked Neil Rosenfield, a CPA with Baker Tilly, to explain how Section 280E of the Internal Revenue Code impacts CRBs and what financial institutions should know about this controversial and complicated tax code. Read his advice for bankers, and his thoughts on whether this tax code is likely to change any time soon.
Upcoming Events
Western Bankers Annual Convention
We are excited to be back out on the road to see our clients and partners in person. This week we are headed to the beautiful island of Kauai to speak at the Western Bankers Association (WBA) 2022 Annual Conference for Bank Presidents, CEOs, and Directors. Please let us know if you’ll be attending and would like to meet us there. 
We’ll also be at the following events:

Shield Compliance transforms how financial institutions manage risk, comply with regulations, and satisfy operational demands associated with serving the legal cannabis industry. Shield’s technology sits behind the financial institution, powering its compliance and risk management operations in the background. This approach enables financial institutions to grow their portfolios and gain an early-mover advantage on new relationships and the added revenue from these customers while protecting themselves from the risks associated with banking this industry.
Schedule a Demo Today
Linkedin Linkedin
Facebook Facebook
Now Hiring Now Hiring
Copyright © 2022 Shield Compliance, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.