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NCUA releases interim guidance on hemp for CUs
The NCUA Monday released interim guidance allowing federally insured credit unions to provide certain financial services to legally operating hemp businesses. This is the first guidance offered by the agency on the issue, under which credit unions will be able to provide a traditional range of financial services including loans to business that fall within their field of membership.
"We thank NCUA Chairman Rodney Hood for issuing guidance clarifying that credit unions may assist businesses legally serving the hemp industry,” said NAFCU President and CEO Dan Berger. “This guidance will provide credit unions more certainty as they work to help their members. 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 guidance is given in the form of a regulatory alert to update credit unions about recent changes in federal law and regulation related to hemp. It was developed at the request of Senate Majority Leader Mitch McConnell, R-Ky., after he heard from Kentucky hemp farmers about their struggles to obtain financial services despite the passage of a hemp-legalization initiative in the 2018 Farm Bill.
"NAFCU thanks Majority Leader Mitch McConnell for his leadership and ongoing support of credit unions," said NAFCU's Executive Vice President of Government Affairs and General Counsel Carrie Hunt.
"Lawful hemp businesses provide exciting new opportunities for rural communities," said NCUA Board Chairman Rodney Hood. "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.
"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," he added.
According to a release from the agency, further guidance will be released once the United States Department of Agriculture finalizes forthcoming regulations and guidelines. Hemp may still be illegal in certain circumstances. For instance, State and Tribal laws.
NAFCU Senior Regulatory Compliance Counsel Elizabeth LaBerge explains the background on legalizing industrial hemp and how credit unions that provide services to marijuana-related businesses could be impacted by recent changes in a new article published in NAFCU's Compliance Monitor.