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The Financial Crimes Enforcement Network (FinCEN) released guidance to address questions related to Bank Secrecy Act (BSA)/anti-money laundering (AML) regulatory requirements for hemp-related business customers. Further guidance is expected to be released once the U.S. Department of Agriculture finalizes forthcoming regulations and guidelines.

FinCEN's new guidance explains how financial institutions can conduct due diligence for hemp-related businesses and identifies the type of information and documentation financial institutions can collect from hemp-related businesses to comply with BSA regulatory requirements.

The guidance specifically addresses:

• BSA/AML program expectations;
• suspicious activity reporting (SAR), including that SARs do not have to be filed unless meeting the threshold; and
• currency transaction reports and FinCEN Form 8300 (reporting of cash payments over $10,000 received in a trade or business).

It provides that financial institutions may confirm a hemp grower's compliance with state, tribal, or USDA licensing requirements by either:

• obtaining a written attestation by the hemp grower that they are validly licensed; or
• a copy such license.

Additional information depends of risks posed and may include crop inspection or testing reports, license renewals, and updated attestations from the business.

FinCEN notes that the guidance is intended to enhance the availability of financial services for, and the financial transparency of, hemp-related businesses in compliance with federal law. It supplements the 2019 interagency statement on providing financial services to customers engaged in hemp-related businesses.

The NCUA earlier this month issued a Letter to Credit Unions providing additional information for credit unions that are serving, or are considering serving, legal hemp-related businesses amid the coronavirus pandemic. The agency in 2019 released interim guidance allowing federally insured credit unions to provide certain financial services to legally-operating hemp businesses as hemp-derived products became legal at the federal level under the 2018 Farm Bill. Other banking regulators later released similar guidance after the U.S. Department of Agriculture issued an interim final rule in October that outlines provisions for legal hemp production.

The issue of providing financial services to hemp businesses is separate from that of serving marijuana-related businesses. While NAFCU has not and will not take a position on the legalization or decriminalization of marijuana, the association has several resources on the issue and continues to encourage Congress to consider legislative complexities as several states have legalized the drug.

In a Compliance Blog post earlier this year, NAFCU Regulatory Affairs Counsel Kaley Schafer reviewed the current landscape of marijuana banking. In addition, NAFCU has released an issue brief that provides credit unions with comprehensive, up-to-date information on federal legislative efforts and state-level marijuana laws.