Thaedra Frangos spent 25 years investigating financial crimes for state and federal agencies and literally wrote a book on “Trade Based Money Laundering and Terrorist Financing.”
She looks at the cannabis industry in New Jersey and sees a wrong that needs to be corrected.
“These are legitimate businesses in the state of New Jersey and they have no legitimate means to bank. And that’s not right,” Frangos told NJ Cannabis Media. “So here I am with law enforcement experience and contacts, with banking compliance experience and contacts. I would be a great facilitator to bring this together.”
Frangos’ plan to facilitate this is opening the Garden State Green Bank.
The Garden State Green Bank would be solely for cannabis-related businesses in New Jersey from Alternative Treatment Centers and their owners and employees to ancillary businesses. And it would provide cash services, checking and savings accounts, business and personal loans, credit cards, cashless ATMs and payroll services. It would also begin with a brick-and-mortar location.
Frangos, who worked for HSBC and Goldman Sachs after leaving government, is in the process of raising the $6 million in capital needed to apply for a charter with the state Department of Banking and Insurance.
Because marijuana is illegal on a federal level, banking is one of the thorniest issues facing the industry.
For Frangos, creating this bank is an opportunity to establish herself on the ground floor of the potential $1 billion-plus industry in New Jersey and to provide financial stability to those in and entering the business.
“These aren’t individuals who are looking to launder money,” Frangos says, “but they’re scared to death because it’s so bifurcated. No other industry operates like that.”
Having a bank dedicated to the industry would provide a level of security to businesses that currently pay high monthly fees when they do find an institution willing to work with them. In addition, if onboarded, accounts are terminated frequently, often with no forewarning and the banks offer limited products and services.
“I didn’t realize how vital and how important this could be on some many different levels – not just from a cash management perspective but from an anti-anxiety perspective from a business owner,” Frangos says.
The blueprint for Garden State Green Bank is:
- Operate as a state-chartered, limited purpose commercial bank that only requires state regulatory oversight.
- Maintain private insurance and cash reserves rather than FDIC insurance.
- Provide a closed loop network for checking, cashless ATMs and credit cards, eliminating the need for access to the FedWire.
- Provide creative ideas for legally obtaining a Federal Reserve Bank Master Account.
So far, Frangos has chosen a board of directors and advisory board members and had preliminary meetings with the state bank regulators.
In addition to raising capital, she’s also formalizing her C-suite management, building operational risk management framework and developing an infrastructure plan.