MBank in Gresham, Ore., has decided to cease providing banking services to the marijuana industry, just one year after it began serving such clients.
The bank said it is giving its 70 cannabis industry clients 60 days' notice that it will no longer provide them with banking services, according to an April 10 press release. The bank attributed the decision to its size and the compliance work required to serve the high-risk industry.
"The cost of compliance was not something a small community bank like ours could handle and properly serve the cannabis-related industry," MBank president and chief executive told American Banker. "We very much plan to be an active resource for the industry, especially with the State of Oregon as they move through writing the rules for recreational legalization."
Starting in July, possession, use and cultivation of marijuana will be legal in Oregon for adults over the age of 21. Medical marijuana was already legal in Oregon, and in neighboring Washington State, recreational marijuana was voted into law in 2012.
MBank continues to work with regulators "on significant issues," Baker said. The $163 million-asset bank experienced a string of financial problems that almost caused it to fail. The Federal Deposit Insurance Corp. terminated its corrective action directive with MBank in March 2014.