NCUA & FinCEN issue additional guidance on hemp banking

As the hemp baking industry continues to grow and stabilize, credit unions need to be kept up-to-date on how to adequately serve legal hemp-related businesses. The National Credit Union Association (NCUA) recently issued a Letter to Credit Unions providing additional guidance supplemental to a 2019 Regulatory Alert. Spurred by the effects of the COVID-19 pandemic on hemp-related businesses, the NCUA issued its letter for advisory purposes, providing no new expectations or requirements for credit unions.

When the Agricultural Act of 2018 (the 2018 Farm Bill) removed hemp from Schedule I of the Controlled Substances Act, the U.S. Department of Agriculture (USDA) was directed to establish a national regulatory framework for nationwide hemp production. This was done through an interim final rule establishing the U.S. Domestic Hemp Production Program. This rule will expire on December 31, 2021 if not replaced by a final rule.

The NCUA reminds credit unions that it is important to “stay current with the federal, state and Native American tribal laws and regulations that apply to any hemp-related businesses they serve.” The hemp-industry follows a patch work of state and local regulatory requirements. With the ever-growing landscape of the hemp industry and new COVID-19 considerations, it is crucial for the agency to continually provide guidance. The recent letter provides key clarifications under the 2018 Farm Bill and addresses frequently asked questions.

Some important guidance pulled from the NCUA’s letter includes the following:

 

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