On July 3rd, New York State’s Department of Financial Services issued a strong statement encouraging both credit unions and banks to consider providing banking services to marijuana and hemp businesses legally operating under state law. Full disclosure: the Association advocated for the Department to come out with just such guidance.
“The Department of Financial Services is aware…, that the unsettled legal environment at the Federal level has discouraged institutions from providing financial services to companies with medical marijuana or industrial hemp operations. This guidance is intended to clarify the regulatory landscape and encourage New York State-chartered banks and credit unions to offer banking services to these New York businesses. Institutions prepared to apply sound practices of customer due diligence and transaction monitoring. . .should consider to commence providing financial services.”
In addition, the Department stressed in an accompanying statement that it is ready to “work with chartering institutions to assist them in moving forward towards commencing operation [in a] very safe and sound manner” Industrial Hemp refers to products produced from cannabis plants that don’t have high levels of Tetrahydrocannabinol (THC). Both the federal government and New York State have authorized the limited growth of this product in recent years, hoping that its wide variety of uses will spur economic growth in areas such as New York’s Southern Tier, but financial institutions remain reluctant to provide banking services.
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