Hemp businesses won’t have to jump through so many hoops to secure banking services.
Four federal agencies and state bank regulators released a statement Tuesday that “emphasizes” that “banks are no longer required to file suspicious activity reports (SAR) for customers solely because they are engaged in the growth or cultivation of hemp,” as long as all parties are following the law.
The statement, which follows the passage of the 2018 Farm Bill, which legalized hemp, was issued to “provide clarity regarding the legal status of commercial growth and production of hemp and relevant requirements for banks under the Bank Secrecy Act (BSA) and its implementing regulations.”
(Read Cannabis Wire’s coverage of the 2018 Farm Bill and hemp-related developments at the USDA.)
The statement was issued by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, and the Conference of State Bank Supervisors.
Hemp business owners should also expect the Financial Crimes Enforcement Network (FinCEN) to announce more guidance after “further reviewing and evaluating” the USDA interim final rule on hemp cultivation, which was released in October.
It’s on people working in the hemp industry to follow rules set forth by the Farm Bill, and while members of the cannabis industry have faced high hurdles to secure banking services thanks to federal prohibition, there will remain some level of risk for banks to work with any type of cannabis business.
In short, it’s up to banks to decide what level of risk they’re comfortable with when deciding which businesses to work with.
“When deciding to serve hemp-related businesses, banks must comply with applicable regulatory requirements for customer identification, suspicious activity reporting, currency transaction reporting, and risk-based customer due diligence, including the collection of beneficial ownership information for legal entity customers,” the statement read.