Cannabis Banking and Consumer Awareness Spark 'REACH' Attendees

Spark session during the REACH Conference

Two different “Spark Sessions” on cannabis banking and consumer awareness of credit unions ignited on Wednesday afternoon immediately before the opening general session of the California and Nevada Credit Union Leagues’ REACH 2018 conference in Hollywood, CA.

The gatherings represented a new feature leading into the Leagues’ annual convention this year as thought leaders in the industry try to stay on top of the latest societal and legislative trends that impact households, communities, and banking.

‘Credit Union Awareness and You’
“Credit Union Awareness and You” discussed the research behind the recently announced consumer awareness campaign by the Credit Union National Association (CUNA), its marketing campaign launch, and how credit unions can leverage the campaign to their advantage. It was presented by Teresa Freeborn, CEO of Xceed Financial CU; Michelle Hunter, chief experience officer of CU of Southern California; and Graeme Trayner, managing director of GPG.

U.S. credit unions have made up 7 percent of the total depository-based financial services market share for several years. Meanwhile, banks routinely outspend credit unions $43 to $1 on marketing efforts.

With the help of local credit unions and state leagues, CUNA will raise $100 million over the next three years to fund and sustain a research-driven national credit union awareness program. “Open Your Eyes to a Credit Union” is an industry-wide initiative to educate a new generation of consumers. This campaign will launch and run in the digital-creative marketplace between now and 2021.

“According to the research, consumers think either they can’t join a credit union, or credit unions are too local,” said Teresa Freeborn, chair of CUNA’s Creating Awareness Advisory Group and CEO of Xceed Financial CU. “They already know we are friendly and have better rates. But they all tune out because they don’t think we are relevant to them.” She added that the campaign is not a “top down” national initiative that won’t take ideas from local credit unions, but rather: “This is about what we want as credit unions. We’ll have solid consumer research to check in with the campaign every step of the way so we can change it ongoing.”

‘Banking on Cannabis?’
“Banking on Cannabis?” addressed the challenges and opportunities of cannabis banking, and was presented by Shane Saunders, chief experience officer for Maps CU; Stephanie Winegarden, vice president of operations for Santa Cruz Community CU; and Lynn Ciani, executive vice president and general counsel for Numerica CU.

Forbes.com has reported there were 411 financial intuitions in the United States actively operating accounts for cannabis, according to a Financial Crimes Enforcement Network (FinCEN) report. This is a 20 percent increase over last year.

With more states legalizing recreational cannabis, businesses are faced with expanding challenges of this unbanked business, including many credit unions that are considering banking cannabis today. The panel shared their experiences, their board’s thought process, and the back-office requirements, including staffing and insurance, regulatory, and anti-money-laundering procedures they have implemented.

“We entered this space with a mindset that we could walk away from this line of business at any time and not have any impact to our credit union,” Saunders said. “You can’t enter this thinking you will build your bottom line or bring in significant revenue.” He added that cannabis-business members have a “high churn” in deposits—on average they each have $80,000 - $100,000 deposited at any given time. “There’s lots of cash coming in and lots of cash going out.”

Want a "recap" of REACH 2018? Visit the "REACH Onsite Live" news page! Also check out the REACH Social Wall—a round-up of social media posts. Or see Twitter (@CUatREACH). This year’s REACH 2018 conference—hosted by the California and Nevada Credit Union Leagues from Nov. 6 – 9—was held at the Loews Hotel near Hollywood & Highland (in Hollywood, CA), a world-class entertainment destination. The annual REACH conference is a premier event drawing 700 – 800 credit union leaders and system partners from across the United States.

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