Hemp Industry Updates
Federal Regulators Address Banking for Hemp-Related Businesses
It appears that federal regulators are finally taking steps to ease the challenges that financial institutions and marijuana businesses face when it comes to banking. On December 3, the Federal Reserve tweeted that several financial regulatory agencies, including the Federal Reserve, FDIC, USOCC, CSBS, and FinCen, will “clarify” the requirements to provide hemp-related businesses with financial services.
@federalreserve @fdicgov @usocc @CSBSnews and FinCEN clarify requirements for providing financial services to hemp-related businesses: https://t.co/XFFAl0qeOq
— Federal Reserve (@federalreserve) December 3, 2019
Further, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, Office of the Comptroller of the Currency, and Conference of State Bank Supervisors released a memo, which can be read in full in their webpage and is titled Providing Financial Services to Customers Engaged in Hemp-Related Businesses.
The memo indicates that its purpose is to provide clarify regarding the legal status of commercial growth and production or hemp, and the relevant requirements for bank under the Bank Secrecy Act. It further notes that additional guidance will be issued by FinCEN after the USDA reviews and finalizes its interim rules.
In addition, the memo informs readers, among other things, that bank-customers that are engaged in hemp-related businesses are responsible for adhering to the requirements of the 2018 Farm Bill and any applicable regulations. It also provides that it is within the bank’s discretion to determine the types of permissible services and accounts that it offers, and that they must have a BSA/AML compliance program that is up to par with the complexity and risks involved. If a bank chooses to service a hemp-related business, then it must comply with the regulatory requirements applicable and that concern consumer identification, suspicious activity reporting, currency transaction reporting, and customer due-diligence based on risk.
Moreover, the memo makes clear that when it comes to hemp-related businesses, banks should continue to follow FIN-2014-G001 – a FinCEN guidance, and BSA Expectations Regarding Marijuana-Related Businesses.
At this point, it will certainly be interesting to see any upcoming progress and whether a cannabis banking bill will be enacted.