Helping Cannabis Businesses Get & Keep a Bank Account

sundie seefried

Sundie Seefried is the CEO of Safe Harbor Private Banking and shares why she is successful in helping cannabis companies get and keep a bank account. She also covers how to interpret The Cole Memo to stay in compliance with regulators and how she is successfully processing 65-70 Million dollars a month.

Key Takeaways
[0:51] – Sundie’s background in banking
[2:31] – What Partner Colorado Credit Union does
[5:51] – The current landscape of cannabis banking
[8:18] – Understanding The Cole Memo
[10:51] – Why Sundie is successful in cannabis banking
[13:38] – How Partner Colorado Credit Union makes money
[16:48] – Sundie talks about day-to-day banking challenges
[20:19] – Sundie talks about how they deal with all the cash
[22:12] – Common regulator concerns
[25:14] – Does banking work for companies that are licensed in multiple states?
[29:02] – How do debit and credit cards work for cannabis businesses
[31:57] – Sundie gives advice on banking in the cannabis industry
[33:44] – Sundie talks about her trip to D.C. to meet politicians
[35:37] – Cannabis banking three to five years in the future
[40:39] – Sundie answers some personal development questions
[43:38] – Contact details for Partner Colorado Credit Union

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Read Full Transcript

In the United States banking for cannabis related companies is a huge problem. Here to tell us about it and how you can have a responsible and safe banking relationship is Sundie Seefried, CEO and President of Partner Colorado Credit Union. Sundie, welcome to CannaInsider.

Sundie: Thank you Matt, glad to be here.

Matthew: Before we get started with banking, can you tell us a little bit about your background and how you got into banking and specifically, helping cannabis companies get banked?

Sundie: Sure, it’s an interesting story because I was headed to retirement. I’d actually put my notice in with the credit union here, and I had about six months left. And I was meeting with some attorney friends and they said well you’re a banker. Why can’t our clients get any bank accounts? And I said, well gee, we just came out of a recession, and nobody is interested in taking on additional risk, and I think our regulators really kind of just shake their heads no when the topic comes up, but let me do some research.

So I went and did some research, and I was really surprised by my findings. And I guess, the safety issue really stuck out, and when I explained to the board how the cash was being handled in their own communities they were a little appalled as well and feared for their members and their families. And the more we learned the less we could ignore the situation around us. The second thing that really bothered me about my research, as we were going through it, was that this was an industry that was emerging and legitimizing itself, and the lack of banking actually was forcing them to do less than legal activities within the system in order to get payment services.

So we were technically making criminals of the industry by not banking them, and I felt as a banker, our side of that equation, we weren’t living up to what we should be doing for our communities, especially as a credit union. So we really felt compelled to right this wrong and find a solution for Colorado.

Matthew: Well I’m glad you did. Can you tell us a little bit about Partner Colorado Credit Union, where it’s located and who you serve?

Sundie: We are in the greater Denver metro area, so we have about four branches around the city. And we were chartered in 1932 as a postal credit union. Post office employees pulled their funds and decided that they were going to create a credit union, and that’s where it started, as a cooperative. The interesting thing about credit unions is that we were actually chartered by Congress to serve the underserved and the unbanked. So philosophically this entire project fit into the foundation upon which credit unions were built to exist. And since we exist to serve our communities, it was important that we stepped up. Our communities changed when marijuana became legal and therefore our objectives and our strategies needed to change with our community. Safe Harbor Private Banking is actually a division of Partner Colorado Credit Union, and the reason we named it separately and hold all the accounts separately is for additional security purposes on these accounts.

Matthew: How long exactly have you been working with cannabis companies? How far does it go back specifically?

Sundie: I started my research in 2014, which is right after they issued the guidance from D.C. And we actually launched the program in January of 2015, after about 6 months of jumping through hoops and getting ready and developing all of our strategies. So it’s just been about over two years now, and we have about 110 clients. And we process probably $65million to $70million a month, which we feel pretty good about that because our intent was to get the money off the streets. Our first ten charter members were really quite instrumental in the success of the program.

They really trusted us, first of all, to bank with us, and then second of all, they understood that for us to bank the business we really needed to understand the industry. And so they were really generous with their time and their education and bringing us on-site and showing us all of their monitoring systems and allow us to just see everything in order for us to build a program that incorporated everything about the industry into this program and be able to mitigate all of the risk factors that we would find. So I really give them a lot of credit for helping us get this program launched.

Matthew: Can you paint a picture of where we are right now in terms of banking for cannabis related companies here in the United States? Because there’s a lot of people listening that will have one or two really bad pain points for their cannabis business. There’s people right now that are just starting their cannabis business, and they’ve heard there’s issues and they’re not quite sure of what they are. They just know there’s some pain. And then there’s even people in Canada or different places in the world that are just appalled by what’s going on with our banking. So maybe you could just paint a picture at a high level of what the situation and the problems and some of the opportunities are.

Sundie: Well first of all, I think the industry offers a lot of opportunity for the banking world, but the discrepancy between the legality at the state level and the illegality at the federal level makes it very difficult for anybody to enter this business. We are subject to prosecution and heavy fines just for doing what we’re doing today. It hasn’t been a practice of what’s happened in terms of people trying to serve the industry. Most of the time programs just get shut down, but you can’t put the entire credit union or banking institution at risk for a segment of business because what would happen is if it wasn’t done correctly, an institution could be easily fined millions of dollars, which would shut the entire organization down, not just the program.

So banks and credit unions are in a situation where they want to serve the industry, they see the legitimacy of the industry and the opportunity, but to enter that they’re thinking they’re risking their entire organization. And the larger the organization, the less likely they are to enter it. So what you find are more smaller community organizations, like ourselves, that would enter the market and pay attention to the community and take that risk, and it’s still a risk, but the way we went at it, and the way the other credit unions are going at it, is to be very transparent and very close to the regulators to make sure we’re doing it right.

I think everybody with whom we speak on any level knows the money needs to get off the streets. And so that is a factor that we took into consideration. If they want the money off the streets, even though there’s this discrepancy and the legality issue, are they really going to come in and prosecute us, or are they going to come in and say, somebody is going to have to start somewhere and this money has to get off the streets and we’re going to tolerate this until we can fix the legality issue. And that’s pretty much, I think, what we’re banking on.

Matthew: And can you talk a little bit about what the Cole Memo is and why that’s such an important memo?

Sundie: The Cole Memo is what I would consider a real show stopper for a lot of banking institutions and credit unions that want to get into this. And the reason is with our normal business accounts we don’t have to know how they’re protecting themselves on every level from prosecution or legal ramifications. But with this industry, the Cole Memo spells out the eight priorities, and every licensed entity needs to make sure they’re not implicating one of those eight priorities set forth in the Cole Memo.

Now to take that one step further, the bank environment has to make sure the client in this case isn’t doing anything to implicate one of those eight priorities. So if you take just one priority, which says, don’t sell cannabis to a minor, it’s difficult enough for the business to protect themselves, but how does your banking entity actually guarantee that that client is not implicating that priority and actually selling to a minor. How can anyone guarantee that product isn’t going over state lines? I don’t think anybody can guarantee that at any level. So the best thing we can do is monitor the business practices, get into the organization, see how they’re protecting themselves. The more they mitigate the risk, the less likely we are to get stuck in a situation where the regulators are thinking that we’re not watching the shop.

So that’s why the relationship is much tighter with cannabis organizations than regular organizations with whom we bank. It’s extremely important for us to watch this particular issue and to know that our clients know how important that Cole Memo is to them because it is also important to us.

Matthew: So the thing that strikes me about what you’re doing here is that you’re able to actually have live bank accounts for your clients. I mean, I keep on hearing all the time about people in the industry, oh I just got this bank account closed, I just got this bank account closed. But you seem to have a model here that works because you’re really, let’s say, focused on the details of what the entire ecosystem wants. So tell us, how are you able to accomplish this when all these other banks and credit unions just don’t seem to be able to?

Sundie: Well first I have to give credit to those who came before us, because I studied them and their actions and activities to make sure that I wouldn’t make any similar mistakes, or that I could learn from their experience. What I learned was if I was going to go into this, we had to go to the very highest level of compliance. And the thing about the guidelines that they give us is that they only give us red flags. The rest of it we have to make up. We have to meet the criteria sufficient enough to find those red flags and avoid any criminal activity.

So you’ve got every banking institution and credit union out there creating their own processes. So I said to myself, well I’m just going to create the highest level stand, and I have over 30 years of experience in the banking environment. So I had enough information and enough experience to know what an auditor would be looking for, what a regulator would be looking for, and I was able to create solid mitigating strategies. What has kept us in the business at this point in time is that we have spared no expense on resources, and we told all of our clients this coming in the door. That we have to operate to the highest level, which means it’s a compliance program first.

We now for those 110 clients have 10 full-time, management level bank secrecy officers, which is not a low cost resource. Sixty percent of their time is spent on compliance, not service. And even after two years, if I look to streamline the program I have to say that I have not been able to find any manner in which I could streamline this. And the same thing about that is I don’t know that I want to streamline this and put anybody’s account at risk because our whole objective was never to be that bank calling somebody and saying, we have to close your account because we didn’t do it thoroughly enough.

I think what really drove us, because this was not an easy process for us in any way, shape or form, but what really drove us was doing the right thing for our community, and the more we saw that cash starting to flow through, the more we started wondering where in the community this was being stored and hidden. And so I think that just gave us a good driving factor to keep us on track to get this done.

Matthew: Now how does your credit union make money from cannabis companies to keep the lights on and to continue to operate? Because typically credit unions are kind of low fee, but you have a high overhead model here with these banking secrecy officers and a lot of the compliance infrastructure you’ve set up. So how do you make money?

Sundie: Well I think everybody in the industry who’s banking will tell you that banking is expensive and it is. As a credit union professional, it’s been difficult for me to even charge the fees we have to charge, but at the same time, I know it won’t always be that expensive, but until that black market is minimized and the majority of industry has a bank account, we are going to have to keep this high level of resources on the task. We charge on incoming funds because that is where the risk is. Everything we do is based upon the dollars and the checks and any monetary instrument that comes into an account. We have to track that. We have to report that. We have to validate that, and we have to monitor that.

When I say monitor that, I mean also monitoring outgoing funds. We can’t just monitor incoming funds. We have to also, according to our guidelines, make sure that none of the funds are outgoing to any illicit or criminal activity. So it is expensive. It just depends on how people price it, but I kept watching this the first year and I think my clients realized it was a test for us. And we have made a sufficient amount of money. I can tell you that actually we are charging the same thing we started charging year one. So we were right on track with that, and it’s been plenty and sufficient money to do it. I haven’t really thought about increasing the fees because it’s covering the costs plus a little extra, which we do need to make money.

Matthew: So you charge as the money comes in, that’s the highest risk point is. Can you give us an idea of is there a range of what you charge per how much comes in, or is there a risk profile assessed by the type of companies, or how does that work specifically?

Sundie: They’re all charged the same amount, and it’s between 30 basis points and 45 basis points, at this point in time, but with the consideration of our national launch in program. We’re going to have to match the standards of the national program, and unfortunately taking a program nationally is not inexpensive. So if you were depositing at this point in time a million dollars a month, your fees would be about $3,000, and therefore when you get to the lower end they’re paying much less because they’re depositing less.

Matthew: So kind of between a quarter and a half of a percentage point.

Sundie: Yes, that would be about right.

Matthew: You mentioned your secrecy officers. You have a growing team there. Can you tell us what your day-to-day life is like? You’ve give us some details there, but day-to-day, week-to-week, what’s your life like? What kind of issues are you grappling with? You’re looking at transactions coming in and going out. You’re probably having things that your secrecy officers are coming back to you with. What other kind of issues do you grapple with, or do you find challenging, or if you could wave a magic wand, wish they would go away?

Sundie: I think the interesting thing too I’d like to say is that we are trying to slow our program down because we’ve gotten to a comfort point where we don’t want to have this program get much larger. You can only do so much at a certain size organization. We have limitations to manage too, which is unfortunate because there’s one thing. It’s really difficult for every one of us in the program is somebody calling and saying I just need a bank account, and they have all these stories, and we want to solve the problem, but we can’t solve it for all of them.

The most time consuming thing we do is onboard and do our due diligence, which can take two to three weeks, easily. And then all of the on-site activities, so bankers are required to go on-site and meet with the owners and the managers and understand all the cash flow, understand all the strategic direction and keep track of any changes in ownership or key personnel. That’s all required, so that’s very time consuming. And if we didn’t have to do that, I think life would be easier. In a normal business account, you probably have to do a drive-by once a year to make sure the business is still there.

So we’re looking at quarterly visits to do all of this, which is very, very time consuming. The rest of our time, as I said, 60% of it is spent on compliance. What that means is they’re looking at the deposits going into the account. They’re looking at the validation documents on a regular basis to make sure that the sales that are being reported to the state match the deposits going into the account. That legitimizes those transactions, but it’s not just sales deposits that require validation. There’s a lot of other cash and money flowing through these accounts. As an example, investment funds.

People would think that would be an easy thing to bring into a bank account, but even that must be validated. We have to know the source of all funds coming in to a cannabis account, and we have to validate it. So if there’s ten investors, we have to validate the process in which those investors are vetted. Are they accredited investors? Are they friends and family? We have to ensure those dollars coming in from investment funds are (1) not coming from any criminal activity or source out there, and (2) as they’re being returned to the investors, that they’re returning it according to contract and not necessarily… I mean, there’s a channel where additional money could run through if we’re not watching.

So it’s quite a process. That validation process is probably what takes up the most of their time. And while it would be nice to automate it, I think we’re going to be able to automate the sales activity as it matches up to the state and point of sale systems, but you’re never going to be able to validate automatically every deposit coming through an account. That personal element will always be there, which requires the banker’s attention.

Matthew: Now I’m curious, how do you deal with the massive amounts of cash that cannabis companies need to deposit? I mean, most of them are taking cash only. They have ATMs in their dispensary. Some have found ways to take debit cards and other inventive solutions that are out there, but what about all the cash?

Sundie: Yes, well we’re at approximately $2.4million a calendar day. That’s not even a business day. So you can imagine there’s no safe way for us to manage that kind of money through our staff and our branching footprint at this point in time. So we have been forced to use armored services to pick up the cash from each of our clients, and then take it to a vaulting facility, verify the cash, look for counterfeits, count it, and then they pool all of our client money and they take it to a federal reserve account.

This takes it one step further in terms of safety. Our members are safe because it’s not coming through our branches. Our employees are not fearful because they’re handling so much money. And then the businesses themselves are not carrying this cash all over town. So it’s just a big safety factor all around, and I think while it’s a little more expensive to do the armored services, it definitely starts taking the fear out of the communities about where that money is because they know it’s being handled from start to finish by the right professional resources.

Matthew: Yeah, because that’s a big bounty, a big booty, if some criminal gets their eyes on that much cash.

Sundie: Yes.

Matthew: I’m surprised that we don’t hear about more armed attacks and things like that because that is just such a mass amount of cash. But anyway, so when you talk to regulators is there one or two concerns that pops into their heads the most, that you hear the most, like we want to know this, we want to know that, or if you can give us this detail or that detail that assuages their concerns?

Sudie: I think right now the greatest concern at the regulatory level is the change in administration. We were starting to build some comfort, I think, at that level. And I think everybody thought it was going to be business as normal, as it was under Obama, but when the administration changed and a lot of talk has been out there everybody is kind of up in arms as to what’s going to happen and are banks and financial institutions in harm’s way at this point in time by continuing to bank this business.

So the biggest issue we talk about is, unfortunately, what’s your exit strategy. If there is one thing that comes out of the federal government, say the revocation of the Cole Memo, we’re all going to have to jump into action. Not just one of us, we’re all going to have to jump into action because they’re taking protective measures away. The other thing we’re talking about is the amendments are driven toward medicinal and not recreational or adult use as well, and you can’t bank half a business. So if they don’t straighten out the fact that all cannabis is the same for banking purposes, we are going to have to deal with that issue as well. It’s impossible for me to bank half a business.

The liquidity issue is driven by the exit strategy. In other words, if I’m sitting on $20million or $30million in deposits in cannabis money, I can’t use that money. I can’t loan it out. I can’t invest it. I must always have that money in reserve prepared to exit at any given day, which causes credit unions of my size to actually go out and borrow money to keep that money liquid. So it costs me money to have that money sitting on deposit. So those are issues that we’re dealing with at this point in time.

I think my bigger concern is if anything comes out of D.C. that would cause our regulators such discomfort that we would have to enact an exit strategy, putting $70million back on the streets in Colorado, inside of a month or two really should concern everybody. It definitely concerns me. How does that happen without disrupting an entire community and disrupting the lives of all those employees that are working for the industry. I think many times in D.C. they think a lot about just the business, and they forget how many employees would be forced back into a cash paycheck if not banked.

Matthew: Yeah, I don’t even think they think that far ahead. That’s my impression.

Sundie: We keep telling them that.

Matthew: Yeah. So if I’m an edibles company and I’m in multiple states, maybe through licensing or some other way, can I have one checking account, or how does that work?

Sundie: Well this is an interesting question because it goes back to the FINs and guidelines and the interpretation of the red flags and what were my mitigating strategies to meet that red flag. My interpretation in this particular situation is that you cannot co-mingle any funds derived from the sale of product between states. Therefore if I have ABC Company, Colorado and they want to have ABC Company in Nevada, they have to have two very separate bank accounts and keep that money completely separated. Of course that’s my interpretation.

Matthew: And do you have to close accounts often, and if you do, what are the typical reasons for that?

Sundie: Actually in two years I think we’ve closed less than five, five or less. So we don’t do that often. We’re really good about educating incoming clients on the rules. And when the bankers are on site quarterly they’re always talking about things they don’t want to do and put their bank account at risk. So because we’ve been able to offer the continuity of banking for them, our clients are more than cooperative to make sure that they’re doing all the right things to keep that bank account safe and the program safe.

Things that would cause us to close an account would be first and foremost if a business was not compliant with state regulations surrounding cannabis. That’s (26.49 unclear) and guideline is very clear on that. So if there are issues and a license is revoked, that account has to be closed. If licenses stop getting renewed, we have to determine at that point in time what’s happening and that’s probably going to cause us to close an account. Obviously violations and citations don’t necessarily force us to close an account, but it causes us to do deeper investigation in that organization. Ask them, how did this happens? What are you doing about this? How many violations is this now in the last 12 months? And then consider the risk of that organization at that point in time.

We’ve had citations happen or violations. And our clients are really good about being forthright and forthcoming and have solutions and do the right things, and keep themselves out of problems and try to prevent to the best of their ability for this to happen again. So that really makes us feel really good they have that level of cooperation. The last thing would be a lack of cooperation with their banker in terms of providing timely and sufficient documentation to justify deposits. Every dollar that banker allows to run through their portfolio has to be validated, and that banker is personally liable and can be banned from the financial industry if they don’t do this correctly. So it’s really up to the level of comfort that bank secrecy officer has with that account.

So I always tell clients, you got to keep your banker comfortable because they’re the one who actually has to make the call in the end on whether or not they can stand in front of federal agency or regulator and say, I can show you how legitimate all the dollars are that run through this account. So that’s why it becomes very important that the cooperation and providing documentation is there between the client and the banker.

Matthew: Now do you allow for your clients to accept debit and credit cards in a dispensary or even for wholesale transactions? I mentioned that briefly, but how does that work?

Sundie: That’s an interesting topic, and I think the majority of people I know in the industry are still holding their breath hoping that Visa and Mastercard and the other credit card companies will come around. This is really not something that is up to us. Really it’s up to the Visa, Mastercard, American Express, those companies as to whether they want any cannabis funds running through their channels. And so, where it really falls is to the sponsor bank who is allowing those transactions and guaranteeing those transactions to some level.

If a sponsor bank is willing to accept those, then we are willing to accept those. What’s happened and we did have a sponsor bank in the very beginning of our program, and we had several of our clients up on cards, and all of a sudden the volume got so high that the sponsor bank got nervous and then shut the program down. So That’s where the shutdown happens. The other thing that happens in this arena is a lot of times a sponsor bank isn’t aware it’s a cannabis organization and suddenly they find it. And then when they find it they go to that merchant processor who signed up that client and they just start shutting down all of their accounts because they know if they brought one cannabis entity, then they probably brought more in and they weren’t completely transparent.

So more than likely it’s not always the cannabis company that’s misrepresenting themselves. It’s the broker in between, the merchant processor that allows that to transpire. There may be some that are allowing this. We just don’t know where they are or who it is and they won’t probably open up to everybody because of the volume. We, on the other hand, have been beginning work with Wallet Solutions, mobile device solutions, real debit and ACH solutions that will be used on the phone where the consumer can go in and type in a code and just make a payment, and the money flows right through us. Right from the dispensary from the consumer into an account and distributed into the dispensary each time.

So those things will take a little time and adjustment, but I think in the long run, because it’s all mobile, I think people will adjust rather than have to worry about carrying cash. And ultimately in my opinion if the cannabis industry can move to these wallet solutions and implemented them, that’s a pretty big consumer base, and I think Mastercard and Visa and the other credit companies will probably lose out on a pretty good market.

Matthew: Yeah. Now if there are people that are listening that are looking to start in this industry, what advice would you give them about banking?

Sundie: I do get a lot of phone calls like that regularly. I tell them to do their research. First see if there’s anybody else being banked, and prepare for cash transactions for the majority of the time until the market changes and more banks and credit unions get into this. And in order to prepare for cash transactions, I would recommend that they hire somebody that understands cash handling. An ex-banker is a good bet, if they’ve handled cash and they’ve handled accounting and that type of thing.

As financial institutions, we are very limited in terms of what we can do. We have concentration limits. And in our particular case, we need to keep our program less than 10% of our assets. So once we start getting close to those limitations, we have to start slowing down the program or stopping the program in order to work within our concentration limits, which is also what we consider our comfort zone. So in our particular case, the cash flow has gotten so high that it’s just too much for once institution in Colorado to do it. We know that we need other institutions, and we’re trying to help in terms of bringing other banks and credit unions to the table.

That’s one of the reasons we went public with what we’re doing because nobody believed anybody was banking this. And that in itself was a risk to go public, but until I would go public and say we’re doing this, it can be done, it’s not easy, then other people weren’t going to be willing to follow. So I’m hoping that what we’re doing is going to help open up options for the industry.

Matthew: Now you went to D.C. last week and met with some politicians. Can you tell us what you did there?

Sundie: Sure, our trip to D.C. we have each year where all the credit unions from across the country fly into D.C., and we lobby all together and get caught up on all our governmental affairs and meet with all of the legislators, and they meet with us. I think there was over 5,000 people from the credit union industry there. And in particular we did two things. The first thing we did was we introduced our program, the Safe Harbor Program, to many credit unions while we were there, so that they understand that there’s a program that they can use that’s been proven and they can implement in their own state.

The second thing we did was I think even more important and that was we had a congressional briefing with four credit unions that got up in front of these congressional staffers and offices and told them what the banking issue was and the safety issue, and the fact that this money needs to continue to be banked and any quick decision in D.C. was going to put this money back on the streets. And I think that we made a lot of headway. A year ago people wouldn’t even want to talk about it. Two years ago they would laugh us out of the offices and say, nobody in D.C. wants to talk about marijuana right now.

So I think the fact that we had the ability to hold a congressional hearing and that we had a lot of attendees, and they were interested in knowing what the issues were as far as banking the money, I think we’re making progress. I think that’s forward movement. It doesn’t mean we’re going to sell the problem anytime soon, but each year we’re progressing forward.

Matthew: I know it’s hard to speculate, especially with a new attorney general, but where do you think we’re going to be with banking in three to five years in the U.S.?

Sundie: Everyone with whom I speak wants this money banked. They want it banked for the accountability purpose. They want it banked for the taxation purposes. They want it banked so they can monitor where the money is going, and they can start sorting out the bad players and the criminal activity. If it’s unbanked, they can’t do any of those things, not accurately. So it’s not that they don’t want it banked. It’s about getting legislation passed and through and signed, and it’s going to be a process.

I think it will probably take a couple more years, but I really believe that, after we launched our program, I really believe that people are going to start stepping up to the plate because they know that it’s working. And they also realize the money needs to be banked. Again, because we’re presenting this to credit unions, they’re concerned about their communities, and they know that they need to look at their communities and the safety in their families and members. So I believe credit unions will be the group of financial institutions that says we need to get this done. We were put here and created by Congress to serve the unbanked and it’s definitely an unserved market.

So I think we’re going to see progress. I think we’re going to see a few credit unions step up to the plate this year and some banks. And I think then after we get a footprint across the country where maybe four or five are operating under the program, then I think people are going to say okay, there’s a way to do this that the others are doing it and we can follow them.

Matthew: No I have a question for that’s unrelated to cannabis bur related to banking. When I go to the Office of the Controller of the Currency website, which anybody can go to, if you just type into Google “Office of Controller of Currency,” you can see the derivative exposures of different banks. And the big, big banks that almost everybody is at are doing a lot of casino level stuff that people just don’t understand. Derivatives trading, which not necessarily itself is bad. It’s just when you look at the size of the derivative exposure of some of these big banks, which almost everybody banks at, it’s in the trillions. The notional value of this derivatives exposure. And eventually we don’t know which snowflake will cause the avalanche here, but at some point this derivatives trading will have a crash again. I’d love people to understand that credit unions don’t have this going on do they? I mean, you don’t see, you’re not doing any kind of derivatives trading at a credit union are you?

Sundie: Credit unions are regulated quite differently than the banks, and our ability to invest in certain things is very limited. Once again, because we’re not for profit and we’re a cooperative. So we can only invest in things like government securities and mortgages. And the majority of the funds that we bring in in the cooperative are supposed to be loaned out to the very cooperative members. So that’s really how we operate. If we need more money to loan out, we raise interest rates. If we have a lot of money to loan out, we lower loan rates because that’s exactly how we invest our money. We really turn it right back and invest into our communities and our members.

So you’re absolutely right that credit unions are not making those risky investments. And that really was great, especially during recession because that’s what kept most all credit unions safe during recessionary times. We all had the same issues in terms of the housing market, but we didn’t make those loans and we didn’t participated in all of that activity that caused the problems that occurred

Matthew: Let’s move on to some personal development questions. I like to ask a few personal development questions to help listeners to get to know you a little bit. With that, is there a book that you feel like has had an important impact in your life or opened you up to a new way of thinking?

Sundie: I am not a big reader. I have to put that right out there. I think what I’m doing here and where we’ve gone as a credit union was really based upon the way I was raised. And my parents were Baptist missionaries my whole life, and they really taught us to do good by the people around us, to pay attention. So it’s probably why I ended up in a credit union as a career, but they always taught us that you need to do the right thing and don’t ignore it.

So when this project came up it was just all around us, and it was just pervasive in everything I did in terms of moving this forward. In fact I will tell you that I probably say it to myself two or three times a month when things get tough. You’re doing the right thing. Just stay on track, this is the right thing to do and it’s not always going to be easy, but you’re supposed to do the right thing, and people respect that. I find that if I had gone into this for the reason of profitability or to build a big reputation, even off of myself, it wouldn’t be the same thing if it was just for doing the right thing. I think some of that stuff happens because of what you do. I think a lot of good things happen when you do the right thing. I think that’s what really drives both myself and my team to keep going forward, even in the face of adversity.

Matthew: I think this is like karmic banking is what I’m hearing here. Doing the right thing.

Sundie: It’s kind of a credit union philosophy. It’s kind of pervasive in how we get taught in terms of banking through credit unions.

Matthew: One more question. Is there a tool, web-based or otherwise, that you consider vital to your day-to-day productivity?

Sundie: I have to say, as it pertains to this particular project, one of the toughest things I think I’ve ever tackled in my life is still the good ole fashioned talent, drive, perseverance, organizational skills and time management skills. But even beyond that, that’s just entrepreneurial talent, and beyond that in this industry you have to have that perseverance in order to sustain that performance long term, because it is such an uphill battle to do anything in the cannabis industry, that you’re always taking that two steps forward and one step back.

So sustaining a high-level performance is really necessary. This is not an industry or even banking program for anybody that doesn’t have a high-level of performance that they can sustain for a long period of time. You really have to have courage to be in this industry and a lot of stamina.

Matthew: How can listeners find out more about Partner Colorado Credit Union and Safe Harbor?

Sundie: That’s an interesting question. We actually had someone send… they came in to open an account the other day, and the interesting thing was he said he had heard about us because we were serving the cannabis industry. And then he had purchased my book and he read it and he couldn’t believe how community focused we were. So he and his wife decided that this was the place they wanted to bank because we were doing good things for our community.

If you want to learn about Partner Colorado Credit Union, you can go to our website which is www.partnercoloradocu.org. Again, that’s www.partnercoloradocu.org. The second place that you can learn about what we’re doing in terms of the cannabis program would be www.navigatingsafeharbor.com. That’s where you’ll learn a little bit more about the program and the journey and process it took to get where we are today.

Matthew: And you mentioned a book there that talks about community banking. What book is that?

Sundie: So very early I was getting a lot of phone calls and I really didn’t have time to take them because I needed my eyes on this program. So I wrote this book called Navigating Safe Harbor, and it answers a lot of questions. the reason I really wrote that book and put it out there was to get the conversation started. Bankers aren’t always the most progressive people, and to start a conversation regarding cannabis in the boardroom is very sensitive. So this book actually walks them through how to start having that conversation. All the things they need to consider about the industry in order to start a program of their own.

Matthew: Great, great, I’m guilty of not really thinking that deeply about when I make a deposit at a credit union that hey, this is going to a small business in my community. It’s like the circulatory system of communities, the cash flow, the money. So I’m glad that you’re doing that and I’m glad you’re doing this work Sundie, and thanks for coming on the show and educating us about banking. We really appreciate it, and thank you for what you are doing in the community there. It’s really important.

Sundie: Well thank you for having me. I have really enjoyed meeting the community. I’ll tell you that much.

Matthew: Great, well good luck to you.

Sundie: Alright, thank you Matt.