Earlier this week, the NCUA released an alert with interim guidance outlining the considerations for Credit Unions serving hemp related businesses. On the surface, it appears to be at least a “yellow” light for Credit Unions, however, the guidance is clear that the hemp must be produced under the industrial hemp pilot provisions of the Agricultural Act of 2014 and the 2018 Farm Bill and USDA has yet to release their regulations so there will be more to come. You can read the specific guidance here: NCUA ALERT Serving Hemp Businesses. Critically, it looks like SARs will NOT have to be filed for hemp related businesses.
Here are some preliminary takeaways:
Due diligence and monitoring will be critical for any Credit Union servicing these MRB or Hemp related businesses.
Credit unions need to remain alert to any indication an account owner is involved in illicit activity or engaging in activity that is unusual for the business.
Credit Unions MUST know the State Laws that pertain to the member served.
Lending to a lawfully operating hemp-related business is permissible.
CUTimes’ David Bauman, does a nice job clarifying the Alert in this recent article: NCUA Issues Interim Guidance Governing Hemp Banking.
Trust Exchange has been watching this area closely for several years and has recently begun to cautiously engage in this area. If you would like to learn more about how our platform can help with Marijuana or Hemp compliance, please contact us HERE.