- Credit unions can service lawfully operating hemp-related businesses, the National Credit Union Administration said in its interim guidance, released Monday.
- The guidance comes in response to requests from several lawmakers who said hemp businesses are struggling to open bank accounts because many financial institutions still question whether they can extend their services to the industry.
- The NCUA's guidance highlights that the production of hemp was legalized with the passage of the 2018 Farm Bill.
Although five federal agencies responded last week to a request for clarity from Sen. Michael Bennet, D-CO, on the hemp banking issue, the NCUA is the first to provide guidance for financial institutions who want to partner with businesses associated with the product. Sen. Chuck Schumer, D-NY, also wrote a letter last week seeking guidance.
Hemp is a strain of the cannabis plant and typically contains less than 0.3% of the psychoactive substance tetrahydrocannabinol (THC).
In a letter sent to federally insured credit unions, NCUA Chairman Rodney Hood said hemp is no longer a controlled substance at the federal level because the 2018 Farm Bill removed the product from Schedule I of the Controlled Substances Act.
Credit unions that wish to service the industry must have a Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance program commensurate with the level of complexity and risks involved, he said.
"Many credit unions have a long and successful history of providing services to the agriculture sector," Hood said. "Hemp provides new opportunities for communities with an economic base involving agriculture. The NCUA encourages credit unions to thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership."
In response to Bennet's request for clarity, the Federal Reserve and the Office of the Comptroller of the Currency said they do not plan to issue guidance in the area, while the Farm Credit Administration said guidance could be on the horizon.
Federal Deposit Insurance Corp. Chair Jelena McWilliams did not indicate whether her agency planned to issue guidance.
The NCUA said it plans to issue additional guidance on hemp once the Department of Agriculture finalizes its own regulations and guidelines for the industry.