ALEXANDRIA, Va.– Federally insured credit unions may provide certain financial services to legally operating hemp businesses under new guidance published today by the National Credit Union Administration.
The guidance will be revised and updated once the United States Department of Agriculture finalizes forthcoming regulations and guidelines, the agency said.
“Credit unions will be able to provide the customary range of financial services for business accounts, including loans, to hemp businesses within their fields of membership,” NCUA said.
“Lawful hemp businesses provide exciting new opportunities for rural communities,” NCUA Chairman Rodney E. Hood said. “I believe today’s interim guidance keeps with the mission of the nation’s cooperative credit system to serve people who have been overlooked and underserved. Many credit unions have a long and successful history of providing services to the agriculture sector. My expectation is that credit unions will thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership.”
The guidance noted that credit unions need to be aware of the Federal, State and Indian Tribe laws and regulations that apply to any hemp-related businesses they serve.
“Credit unions that choose to serve hemp-related businesses in their field of membership need to understand the complexities and risks involved,” the guidance states.
“While it is generally a credit union’s business decision as to the types of permissible services and accounts to offer, credit unions must have a Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance program commensurate with the level of complexity and risks involved,” the agency said. “ In particular, credit unions need to incorporate the following into their BSA/AML policies, procedures, and systems:
- Credit unions need to maintain appropriate due diligence procedures for hemp-related accounts and comply with BSA and AML requirements to file Suspicious Activity Reports (SARs) for any activity that appears to involve potential money laundering or illegal or suspicious activity…
- If a credit union serves hemp-related businesses lawfully operating under the 2014 Farm Bill pilot provisions, it is essential the credit union knows the state’s laws, regulations, and agreements under which each member that is a hemp-related business operates…
- When deciding whether to serve hemp-related businesses that may already be able to operate lawfully–those not dependent on the forthcoming USDA regulations and guidelines for hemp production–the credit union needs to first be familiar with any other federal and state laws and regulations that prohibit, restrict, or otherwise govern these businesses and their activity…
CUToday.info recently reported on the complexities of serving legal hemp businesses here.
NAFCU Responds
NAFCU thanked Hood for issuing the guidance.
"This guidance will provide credit unions more certainty as they work to help their members," said NAFCU President and CEO Dan Berger. "As noted in the guidance, credit unions must make a business decision as to whether to serve hemp businesses that are legal under federal law and, at a minimum, have strong risk measures in place, including ensuring they follow all Bank Secrecy Act requirements."
The trade association stated it's seeking clarity around banking hemp business.
NASCUS Responds
“We commend NCUA for providing additional guidance to credit unions. While it is now legal to provide financial services to hemp businesses – it remains illegal to serve marijuana businesses," said NASCUS President Lucy Ito. "Credit unions must consider the risks given the variability of hemp THC (tetrahydrocannabinol) levels and licensure (mono-licensing) of hemp versus cannabis businesses. Hemp and marijuana look and smell the same and the difference is that hemp plants contain no more than 0.3% of THC. If a credit union, knowingly or unknowingly, serves a business operating in plants that exceed the 0.3% threshold, the credit union could be serving an illegal marijuana business and would thus be subject to penalties. NCUA’s guidance on serving lawful hemp businesses provides credit unions with helpful clarification and given the added complexity of hemp-related compliance, credit unions must weigh the potential exposure when deciding to serve hemp businesses.”