On August 19, 2019, the National Credit Union Administration (“NCUA”) made an economically significant change to the hemp banking landscape. As is the case with cannabis businesses generally, hemp operations have faced considerable limitations with respect to access to traditional banking outlets due to federal prohibitions on banking activities relating to cannabis.
The NCUA released interim guidance affirming that federally insured credit unions may provide financial services to legally operating hemp businesses. Specifically, credit unions are able to provide typical financial services for business accounts, including loans, to hemp-related businesses within their fields of membership.
NCUA also cautioned credit unions to understand the complexities and risks involved: “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 guidance will be revised and updated once the United States Department of Agriculture finalizes forthcoming regulations and guidelines.