Bill Martin has experienced the banking business from both sides.
He is the former president and CEO of Nevada State Bank. He also spent time as an executive with several other local community banks.
But, Martin can also tell you what it’s like to regulate banks. He worked as a banking regulator in Washington, D.C.
One of the toughest problems bankers have been trying to figure out has been the growing medical marijuana industry.
Martin said the banking industry is getting mixed messages from all sides of the government from the Department of Justice to bank regulators.
“So the government on all levels, including the Obama administration, which is over the Department of Justice, is giving all kinds of mixed signals about what is going to happen,” he said.
For instance, marijuana is still listed as a Schedule One narcotic, putting it in the same category as drugs like heroin and cocaine. However, Congress passed a law that stops the DOJ from using money to fight marijuana use in states that have legalized marijuana for medical use, according to Martin.
In addition, he says new rules by the Federal Reserve make it so that banks can't take money from organizations that are breaking federal law and while marijuana is legal in some states, it is still against federal law to grow, sell or possess the drug.
He said "everyone is in the traditional CYA mode" because they're not sure what the rules are and which agency might decide to prosecute.
However, now marijuana dispensary owners are paying everyone from their employees to the IRS with mountains of cash.
The big problem with an all cash businesses, besides the security risk, is the risk for money laundering and skimming.
“You have trace every dollar from the moment it comes through the door of the dispensary all the way through and with cash that it is very difficult to do,” Martin said.
But of course, customers can't use a credit card or check to pay for anything.
Martin believes the solution is in cashless system that is under development currently. He said it would meet all the regulations and allow all transactions to be properly monitored.
Bill Martin, banking executive