Hemp production rule released
The U.S. Department of Agriculture (USDA) released an interim final rule this week that outlines provisions for legal hemp production. The NCUA in August released interim guidance allowing federally insured credit unions to provide certain financial services to legally-operating hemp businesses, and is expected to release additional guidance taking into account the USDA’s rule. NAFCU met with FinCEN recently to discuss potential guidance related to hemp banking.
Hemp-derived products became legal at the federal level under the 2018 Farm Bill. However, until the USDA’s interim rule, there were no regulations for hemp production resulting in little guidance for credit unions to use in performing due diligence to determine if hemp producers were compliant with the law.
The interim final rule provides provisions for hemp production and addresses discrepancies in certain circumstances – such as state and tribal laws – where it might still be illegal. The rule takes effect once published in the Federal Register; it will also be open for a 60-day comment period once published.
The NCUA developed guidance for credit unions to serve hemp-related businesses at the request of Senate Majority Leader Mitch McConnell, R-Ky. NAFCU has resources available for credit unions on hemp banking, including an article in NAFCU’s Compliance Monitor, which discusses the background on legalizing industrial hemp and how credit unions that provide services to marijuana-related businesses could be impacted by recent changes.
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