The National Credit Union Administration (NCUA) issued a memo on Tuesday explaining issues related to providing financial services to hemp businesses.
While the federal agency provided guidance on the topic last year after the crop was legalized under the 2018 Farm Bill, it said the new document’s “purpose is to provide additional information for credit unions that are serving, or considering serving, legal hemp-related businesses, as they, too, have been affected by the COVID-19 pandemic.”
“Lawful hemp businesses provide exciting new opportunities for rural communities, and credit unions should carefully consider whether they can safely and properly serve lawfully operating hemp-related businesses within their fields of membership,” NCUA Chairman Rodney E. Hood wrote.
“It is important that credit unions stay current with the federal, state and Native American tribal laws and regulations that apply to any hemp-related businesses they serve,” he said, noting that the letter does not seek to provide a formal interpretation of U.S. Department of Agriculture (USDA) rules for the crop.
Instead, the agency listed 17 questions and answers about banking hemp businesses that credit unions are likely to have. That includes information about the status of the USDA’s interim final rule, compliance for hemp production, NCUA rules for serving the industry and more.
The agency said its “examiners will be collecting data through the examination process concerning the types of services credit unions are providing to hemp-related businesses” in order to “help the agency better understand how it can assist credit unions serving hemp-related businesses.”
“The NCUA encourages credit unions that are serving, or considering serving, hemp-related businesses to review all available information related to this evolving industry,” the memo concludes. “As more information becomes available, the NCUA will continue to provide additional guidance.”
In December, NCUA finalized a rule that allows people with convictions for simple drug possession to work at credit unions, as long as they meet certain criteria.
In a congressional hearing the same month, Hood was urged to continue clarifying the rules for dealing with hemp businesses since the crop’s federal legalization.
In the meantime, advocates and stakeholders have been pushing lawmakers to enact legislation protecting banks that service state-legal marijuana businesses. The House approved the Secure and Fair Enforcement (SAFE) Banking Act last year and it now awaits action in the Senate Banking Committee.
House Democrats included the cannabis banking language in a coronavirus relief package the chamber approved last month, but leaders in the Republican-controlled Senate have criticized the move.