ALBUQUERQUE, N.M. — U.S. Eagle Federal Credit Union plans to exit the cannabis banking business effective Nov. 1, ending a seven-year initiative that made the Albuquerque-based credit union an early provider of financial services to marijuana-related businesses in New Mexico.
The $1.46-billion credit union will cease operations of its cannabis financial services business following an extensive evaluation, according to Albuquerque Business First. U.S. Eagle launched the operation in 2019.
U.S. Eagle President and CEO Michael Moore told Albuquerque Business First the decision comes as competition has increased and consolidation has occurred within the cannabis industry.
The credit union entered cannabis banking at a time when marijuana businesses had relatively few options for traditional financial services because marijuana remained illegal under federal law.
One of the First in the State
U.S. Eagle’s cannabis operation, known as Aery Group, provided banking services to state-licensed marijuana-related businesses. The credit union became one of the first financial institutions in New Mexico to publicly serve the industry.
The business required enhanced compliance procedures because financial institutions serving marijuana-related companies must navigate the differences between state laws permitting cannabis sales and federal law.
U.S. Eagle’s decision represents a reversal from an earlier strategy that included plans to expand its presence in cannabis banking.
In 2024, U.S. Eagle announced an agreement to acquire Southwest Capital Bank, another New Mexico financial institution that served cannabis-related businesses. The proposed transaction was later terminated.
Market Gets Competitive
The cannabis banking market has also become more competitive since U.S. Eagle entered the business, with additional banks, credit unions and specialized financial services companies offering accounts and other services to marijuana businesses.
The decision to leave the market comes during Moore’s first year as CEO. He succeeded longtime U.S. Eagle President and CEO Marsha Majors, who retired in January.
Majors led the credit union when it launched its cannabis banking initiative in 2019.
U.S. Eagle has not publicly disclosed how many cannabis-related businesses will be affected by the Nov. 1 exit or the dollar amount of deposits associated with those accounts.
One Response
Here at Kohl Analytics Group our work has consistently shown cannibis related businesses (CRB) to be extremely profitable. This is typically due to the fees charged for handling large amounts of cash. However, there are large risks for CUs not familiar with running merchant teller operations in handling this amount of cash. It would be interesting to know why Eagle has left this business.
Our clients are often surprised that their intuition is off about what creates and destroys value at their credit union whether it is a product or member.