Hemp Banking Decision a Matter of Science & Business: NASCUS’ Ito
She says, "Credit unions must weigh the potential exposure when deciding to serve hemp businesses.”
A credit union’s legal exposure if it chooses to serve hemp-related business could boil down to science rather than business, NASCUS President/CEO Lucy Ito warned Tuesday.
While Ito applauded NCUA Chairman Rodney Hood for issuing preliminary guidance to credit unions that want to serve hemp businesses, Ito said that there is little difference between marijuana and hemp.
“We commend NCUA for providing additional guidance to credit unions,” Ito said. “While it is now legal to provide financial services to hemp businesses – it remains illegal to serve marijuana businesses.”
Hemp and marijuana look and smell the same and the difference is that hemp plants contain no more than 0.3 percent of THC, she added
“If a credit union, knowingly or unknowingly, serves a business operating in plants that exceed the 0.3 percent threshold, the credit union could be serving an illegal marijuana business and would thus be subject to penalties,” she said.
She said that credit unions, given the “added complexity of hemp-related compliance, credit unions must weigh the potential exposure when deciding to serve hemp businesses.”
The 2018 farm bill included a provision that removed hemp as a scheduled substance, but the Department of Agriculture has not yet issued rules governing it.
As a result, the NCUA issued interim guidance.
State and tribal laws still could make hemp illegal, Hood said, adding that credit unions must comply with those laws. He said, however, that credit unions that comply with all other laws may serve hemp-related businesses.
CUNA officials were pleased with the NCUA decision.
“This has been an area of interest for credit unions since Congress legalized hemp at the federal level, and we believe this guidance will help alleviate concerns that may have existed,” CUNA Chief Advocacy Officer Ryan Donovan said.
NAFCU officials said that the guidance will help since it clarifies the issue.
“This guidance will provide credit unions more certainty as they work to help their members,” NAFCU President/CEO B. Dan Berger said. “As noted in the guidance, credit unions must make a business decision as to whether to serve hemp businesses that are legal under federal law and, at a minimum, have strong risk measures in place, including ensuring they follow all Bank Secrecy Act requirements.”