NCUA allows credit unions to serve hemp businesses
On August 19, the NCUA released interim guidance allowing federally insured credit unions to service hemp businesses. The guidance notes that, as of December 20, hemp is no longer a controlled substance at the federal level—the Agriculture Improvement Act of 2018 (2018 Farm Bill) removed hemp from Schedule I of the Controlled Substances Act. However, hemp may not be produced lawfully under federal law, beyond a 2014 pilot program, until the USDA promulgates regulations and guidelines to implement the hemp production provisions of the 2018 Farm Bill. The guidance instructs credit unions to be aware of federal, state, and tribal laws and regulations that apply to any hemp-related businesses they may service and to have Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance programs equal to the level of complexity and risks involved. The guidance emphasizes that lending to lawfully operating hemp-related businesses is permissible, but that the lending must be done in accordance with NCUA’s regulations for lending, and appropriate underwriting standards must be considered. NCUA notes that the guidance will be updated once the USDA regulations are finalized.