Alaska may be among the latest states to legalize marijuana, but a long wait time before pot sales become legal in the state will give credit unions the opportunity to decide whether they want to play a role in serving the industry. Early reports indicate that many are not keen on the idea.

On Nov. 4, 2014, Alaskans voted in favor of AS17.38, also known as Proposition 2, which enabled state authorities to tax and regulate the production, use and sale of marijuana. Initial oversight was given to the Alaska Alcohol Beverage Control Board, which was allowed nine months after the law’s effective date of Feb. 24, 2015, to develop regulations governing marijuana-related entities and other aspects of the newly formed industry.

The Alaska legislature further set a 16-month timeframe before the first legal marijuana sales can occur in the state. Initial licenses will be issued starting in May 2016 and any sales prior to that date will be considered illegal and may be prosecuted as a crime, according to FAQs on the board’s web page.

Alaska’s lengthy wait time to commercialization gives credit unions ample opportunity to consider whether or not supporting marijuana-related businesses fits within their mission of serving the underserved. Right now, interest is tepid at best, according to Alaska Credit Union League Chairman Lauren MacVay, who also serves as president/CEO of $131 million True North Federal Credit Union, based in Juneau, Alaska.

“Statewide attitudes range from ‘wait and see’ to ‘no, we're not going there,’” MacVay said. “Until the State of Alaska and local governments figure out how they are handling commercialization, most credit unions will wait on the sidelines until those decisions are reached.”

Kevin Anselm, director of Alaska’s Division of Banking and Securities, echoed MacVay’s observations for Alaska’s financial institutions overall.

“I have not heard that anyone is looking to serve these businesses, but then I wouldn’t,” she said. “It’s our impression that financial institutions are taking a wait-and-see attitude, and I think many are concerned about the implications under federal law.”

The “gray area” in Alaska state law is further complicated by federal statutes that still classify marijuana possession as illegal, MacVay said. Such uncertainty will require more effort and potentially higher overhead costs for credit unions that may want to serve marijuana-related businesses once the opportunity becomes legal.

“There are workload concerns in terms of increased Bank Secrecy Act reporting obligations and general due diligence,” MacVay said. “A recent report stated that managing a marijuana business takes four times more time than it would take a credit union to manage the oversight of a regular business. This is a major factor for a credit union to consider due to the additional staff resources.”

For the $5.7 billion Alaska USA Federal Credit Union in Anchorage, which is the state’s largest credit union, the issue of available resources comes secondary to legal concerns, according to Dan McCue, SVP of corporate administration.

“Alaska USA FCU is a federally chartered credit union,” McCue said. “Since the federal government has not legalized marijuana, Alaska USA has made a business decision not to open accounts related to the marijuana industry.”

Instant Insights /

Alaska Credit Unions Not High on Marijuana Business

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