Federal Bank Regulators OK Hemp Banking and Financial Services

December 6, 2019

By Andrew Kingsdale

On December 3, 2019, federal banking agencies released a joint statement clarifying requirements under the Bank Secrecy Act (BSA) for banks providing financial services to hemp growers. 

Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file Suspicious Activity Reports (SAR’s) with FinCEN (the United States Treasury Department’s Financial Crimes Enforcement Network) solely because a customer is engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR with FinCEN if indicia of suspicious activity warrants.

 

This is a welcome clarification for hemp growers, who can now open bank accounts and obtain other banking services (like loans) without the burden of FinCEN’s heightened scrutiny and mandatory reporting requirements for cannabis-related businesses, which have severely curtailed access to banking services. 

Like the 2018 Farm Bill and interim USDA rules, the joint agency statement is specific to hemp growers and producers only, and not hemp distributors, extractors, or other hemp-related businesses.  

The statement is also significant for what it did not change.  “In the context of marijuana-related businesses, banks should continue following FinCEN guidance FIN-2014-G001 – BSA Expectations Regarding Marijuana-Related Businesses.” 

Finally, the statement adds that FinCEN “will issue additional guidance after further reviewing and evaluating the USDA interim final rule.”  Stay tuned for further developments.

 

This message is provided as an educational public service and is not intended as legal advice. For questions regarding cannabis, hemp or CBD banking, contact the Law Offices of Omar Figueroa at (707) 829-0215 or info@omarfigueroa.com to schedule a confidential legal consultation.