Hood Drumming Up CU Business Among Kentucky Hemp Farmers
In a newspaper op-ed, the NCUA chairman heralds the agency’s move to issue interim rules governing financial services for hemp farmers.
NCUA Chairman Rodney Hood has appeared to be drumming up business for credit unions from Kentucky hemp farmers.
The NCUA recently issued interim rules governing financial services for hemp farmers, and the chairman last week heralded that move in an op-ed in the Lexington Herald-Leader newspaper and on the publication’s website.
“Recently, my agency issued interim guidance to all federally-insured credit unions that makes it clear they may offer the customary range of financial services for business accounts, including lending, to legal hemp-related businesses,” Hood wrote in the op-ed.
The 2018 farm bill included a provision that removed hemp as a scheduled substance. The Department of Agriculture has not yet updated rules governing hemp, so the NCUA issued interim guidance.
Hemp is a major crop in Kentucky, and Republican Senate Majority Leader Mitch McConnell, who represents the Bluegrass State, has been pushing regulators to issue rules and sent them letters encouraging them to do so.
In his op-ed, Hood, a Republican, credited McConnell for letting him know how critical the issue is to Kentucky farmers.
Hood said some hemp businesses have been forced to rely on cash transactions because they could not find financial institutions willing to do business with them.
“Financial services products are like oxygen: Industries and entrepreneurs need them to survive,” he wrote.
And he added that when the Department of Agriculture issues its permanent guidance on hemp farming, the NCUA will quickly issue additional guidance.
While hemp has been removed as a controlled substance, marijuana has not. As a result, many financial institutions have been unwilling to provide services to marijuana-related businesses even in states where marijuana has been legalized.
Hood recently said the NCUA will not sanction a credit union for providing services in those states as long as the institution complies with all safety and soundness rules, as well as Bank Secrecy Act and Anti-Money Laundering regulations.