Press Release

Press Release: Brattleboro Savings & Loan Exiting Cannabis Banking

Ella Guinan 1 Mar 2023

BRATTLEBORO — Brattleboro Savings & Loan has announced that it is withdrawing from offering banking services to Vermont’s cannabis industry. BS&L was one of the first Vermont financial institutions to join the State’s program to offer banking services to this sector.

However, the regulatory requirements of serving businesses that the federal government still considers illegal have proven too costly at BS&L’s strategic scale. The federal government still classifies marijuana as a schedule 1 controlled substance, which is defined as having “a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision.” As a result, while federal regulators have acceded to the reality of legal cannabis at a growing number of states, the monitoring and reporting requirements for banks are heavy and expensive. In addition, Vermont’s cannabis program is explicitly tilted toward small, local growers and retailers. “Federal requirements and regulations don’t scale well for these smaller operations,” says Tom Martyn, BS&L’s CFO, “In order to break even, we would have to charge exorbitant fees to our customers that would not be sustainable or fair to them.”

A recent VTDigger article shows just how tricky banking cannabis can be. The article reported that a Russian oligarch is potentially funding several retail cannabis operations in Vermont. Roman Abramovich is an ally of Russian president Vladimir Putin and is subject to federal and international sanctions that have been placed on Russia and powerful russians over the last number of years. A bank that is even unknowingly involved in providing banking services to a sanctioned person or entity is exposed to substantial liability and risk.

BS&L started to build out policies and protocols for cannabis banking in 2019—three years prior to the State’s legalization of recreational cannabis. “We’ve taken this seriously and worked toward meeting the needs of our clients,” says Deb Stephenson, BS&L’s president and CEO, “I came into this position looking forward to creating a model for community banks to work in this sphere, but we simply can’t make it work.” In order to ease this transition for their current cannabis customers, BS&L will continue to provide services for 90 days as customers move to different institutions. In addition, the bank is also refunding existing customers’ application fees so they can apply elsewhere as painlessly as possible.

According to Vermont’s Cannabis Control Board, there are three other Vermont-based financial institutions offering cannabis banking programs: New England Federal Credit Union, Vermont Federal Credit Union, and Vermont State Employees Credit Union, although VSECU may not be taking on new customers at this time. “There are also a number of larger regional and national financial institutions providing banking services to the cannabis industry who may be able to meet the needs of these businesses and it works because they’re working at a scale that local, community banks simply can’t,” says Donna Rathbun, BS&L’s compliance officer.

About Brattleboro Savings & Loan

Brattleboro Savings & Loan was established in 1912 to serve the financial needs of local residents. Today, as a state-chartered mutual savings bank and Certified B Corporation®, BS&L has expanded its reach to provide a full range of commercial and consumer banking services, with branch offices in Brattleboro, Wilmington and Bondville, and a mortgage lending office in West Dover. The Bank’s wealth management division, Park Place Financial Advisors, provides investment and financial planning services.

Additional information on BS&L is available by contacting Cassie Kelley at [email protected].

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