On the latest episode of the ABA Newsbytes Podcast, Jeffrey Ball — president and CEO of Friendly Hills Bank, Whittier, Calif. — discussed several emerging issues in public policy — including banks’ role in financial innovation and protecting consumers, as well as the increasingly urgent need to address banking marijuana-related businesses. “As fintechs look to develop different products, oftentimes it brings a significant amount of risk to the consumer,” Ball said. “That’s where bank involvement can be very significant. It’s important for banks [to]retain the relationship value, retain the protection of the payments system in how we choose to partner with some of these opportunities.”
As a banker in California, which has long permitted medicinal marijuana and has recently legalized recreational marijuana at the state level, Ball also emphasized the need for a resolution to the gap between state and federal law as the marijuana industry in his state is projected to grow to $7 billion. “The fact that it needs to be banked is paramount,” he said. “Because all of these organizations are not eligible to be banked, it’s putting a lot more risk on the public safety aspect. Ultimately, we’d like to have banks removed from this difficult position of being trapped between federal law and state law.” The issue is growing in salience nationwide as 29 states now have some form of legalized marijuana.
As chairman of ABA’s Government Relations Council, Ball recapped this week’s meeting of the GRC in Washington, D.C., at which financial innovation and cannabis banking were raised. He discussed the outlook for de novo banks in his Southern California market and outlined Friendly Hills Bank’s small business strategy.
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In this episode: