Bank and credit-union leaders brief Commerce & Economic Development committee on fraud, crypto kiosks and cannabis banking

ST. — On Jan. 16, 2025, the Sumitomo House Committee on Commerce and Economic Development heard presentations from leaders of the state’s banking and credit-union trade groups about regulation, fraud prevention, crypto kiosks and the limits of banking for cannabis businesses.

The presentations, delivered by Chris Delia, president of a bankers association, and Joe Bergeron, president of the Association of Vermont Credit Unions, outlined how state and federal regulatory differences shape institution behavior and stressed rising consumer fraud and the ways new payment and crypto machines can be misused.

Why it matters: committee members were given background on who regulates banks in Vermont and where the Legislature’s policy choices fit against federal rules. The session highlighted consumer-protection risks and gaps that can affect residents’ deposits and small businesses, including retail cannabis outlets that often struggle to obtain banking services.

Delia described the regulatory landscape for banks, saying institutions can be state-chartered or nationally chartered and often face multiple regulators. “You might have two, but you could theoretically have three or four that you have to follow,” he said, explaining that even state-chartered banks work with federal regulators such as the FDIC and, for nationally chartered banks, the Office of the Comptroller of the Currency. He warned that federal regulation has sometimes lagged behind technological change and that fintech firms can offer similar services without the same regulatory coverage.

Both presenters detailed a sharp rise in scams and fraud. Delia summarized common schemes and tactics and gave a recent example: “We had an individual down in Southern Vermont who got an email that looked like it was from their bank … and in this case, they said, there’s a problem with your account. We need you to withdraw funds and the number was $9,000.” He warned that money deposited at crypto kiosks is difficult to trace and noted the industry has seen large aggregate losses; he cited a national-market figure of about $150,000,000,000 for scam-related losses.

Delia also discussed crypto kiosks — the gray machines found in retail outlets that let consumers buy or sell cryptocurrency — and said the state previously had 37 kiosks and was down to three after recent policy and market changes. He urged the committee to view kiosk technology through a consumer-protection lens: “If the bad actors are able to use that technology, that’s a problem.”

Bergeron emphasized the cooperative structure of credit unions and their local role. “Two out of every three Vermonters are members of a credit union,” he said, and noted that credit unions returned earnings to members through better rates and lower fees. He presented data the association uses to show credit unions’ activity in mortgage approval and small-business lending and said credit unions in Vermont approved a high share of mortgage applications from low- and moderate-income borrowers.

On cannabis banking, both speakers said federal law remains the major constraint. Delia reviewed the national history of cannabis businesses’ difficulty obtaining financial services and said institutions vary in willingness to serve the sector. He described the stalled federal SAFE Banking legislation and the resulting patchwork of local solutions: “Nothing in Vermont. We need the feds to change their policy,” he said, adding institutions and their regulators face complex requirements and enforcement uncertainty.

Committee members asked about workforce training and the skill overlap between bank and credit-union staff; Bergeron said certification and knowledge expectations are broadly similar across lenders. A person identifying themself as a cannabis retail worker noted that even where some Vermont institutions provide limited services, many retail shops still operate cash-only because card processing and network-branding issues remain.

The presentations did not produce committee votes or formal actions. Speakers said they are available to provide further data to lawmakers and to assist with constituent issues.

The committee recessed for lunch after the session.