- Five federal agencies have responded to a request for clarity and guidance over banking hemp-oriented businesses, according to letters obtained by Marijuana Moment.
- The Federal Reserve and the Office of the Comptroller of the Currency (OCC) do not plan to issue guidance in the area, while the National Credit Union Administration (NCUA) and the Farm Credit Administration (FCA) said guidance could be on the horizon.
- Sen. Michael Bennet, D-CO, wrote the agencies in June requesting clarity that would allow hemp farmers and processors to access financial services.
In the June letter, Bennet, a member of the Senate Committee on Agriculture, Nutrition, and Forestry, said farmers in Colorado cultivated hemp on more than 21,000 acres of land last year, yet they still continue to lack access to the banking system.
Hemp is a strain of the cannabis plant and typically contains less than 0.3% of the psychoactive substance tetrahydrocannabinol (THC). While the production and sale of industrial hemp was legalized with the passage of the 2018 Farm Bill, financial institutions still question whether they can extend their services to businesses associated with the product.
"It is my hope that your agencies can work both expeditiously and in a coordinated manner to issue guidance describing how financial institutions can offer financial products and services to hemp farmers and processors," Bennet wrote.
Fed Chairman Jerome Powell said his agency doesn't plan to issue guidance because it expects institutions to apply their established policies, procedures and practices to their hemp industry customers.
"But we will continue to monitor this issue," Powell said in his letter.
The OCC cited similar reasons for deciding not to issue guidance.
Comptroller of the Currency Joseph Otting stated in his letter the agency expects OCC-supervised banks to apply their established policies to the industry. Like the Fed, Otting said his agency will continue to monitor this issue.
In her letter, Federal Deposit Insurance Corp. (FDIC) Chair Jelena McWilliams did not indicate whether the agency planned to issue guidance, but said it is "in the process of providing training to our examiners on changes to the legal status of hemp and instructing them that the suspicious activity filing requirements prescribed by the Financial Crimes Enforcement Network for cannabis do not apply to hemp."
Institutions should assess the issue on a "case-by-case basis," McWilliams said.
"You have my assurance that we will continue to maintain a dialogue with the institutions we supervise to reinforce this policy regarding the provision of services to legal hemp businesses," she wrote.
The FCA said it also continues to monitor the development of the hemp program and will provide additional guidance as necessary.
FCA acting CEO Jeffery Hall directed Bennet to the agency's April memorandum that "outlines our exception for System institutions to develop underwriting standards for hemp production and processing to take into account applicable federal and state laws, growing conditions, and marketing opportunities."
NCUA Chairman Rodney Hood said his agency is working on possible future guidance and is consulting with the Financial Crimes Enforcement Network and other federal banking agencies.
But Hood said until the U.S. Department of Agriculture releases rules and regulations for manufacturing and marketing hemp, "the uncertainty for financial institutions will likely remain."
In April, USDA Secretary Sonny Purdue said rules would be in place in time for next year's planting season.
Senate Minority Leader Chuck Schumer, D-NY, this week urged regulators to provide clarity for financial institutions looking to bank industrial hemp-oriented businesses.
In a letter to the FDIC, the Fed and the OCC, Schumer asked the agencies to issue updated guidance "as soon as possible."
"Without access to traditional financial services, such as checking accounts and credit, many hemp businesses have been unable to effectively expand beyond their basic business operations," he wrote.