Guidance that allows federally insured credit unions to provide certain financial services to legally operating hemp businesses was published Monday by the federal regulator of credit unions.
In the guidance, the National Credit Union Administration (NCUA) said credit unions will be able to provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp-related businesses within their fields of membership. “The information in this alert is intended to help credit unions better understand what they should consider in providing financial services to lawfully operating hemp businesses,” the guidance stated.
NCUA also said the guidance will be revised and updated when the Department of Agriculture finalizes its rules and guidelines. The agency gave no timeline for when that might occur.
In a statement, NCUA Board Chairman Rodney Hood said he expects credit unions will “thoughtfully consider” their ability to safely and properly serve legal hemp-related businesses within their customer bases (known by credit unions as “field of memberships.”)
“Lawful hemp businesses provide exciting new opportunities for rural communities,” Hood said. “I believe today’s interim guidance keeps with the mission of the nation’s cooperative credit system to serve people who have been overlooked and underserved. Many credit unions have a long and successful history of providing services to the agriculture sector.”
However, an industry group – the National Association of State Credit Union Supervisors (NASCUS) – pointed out that credit unions need to be wary when engaging in hemp-related business.
“Credit unions must consider the risks given the variability of hemp THC (tetrahydrocannabinol) levels and licensure (mono-licensing) of hemp versus cannabis businesses,” according to Lucy Ito, president and CEO of the Arlington, Va.-based group. “Hemp and marijuana look and smell the same and the difference is that hemp plants contain no more than 0.3 percent of THC. 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 the agency’s guidance on serving lawful hemp businesses provides credit unions with “helpful clarification and given the added complexity of hemp-related compliance, credit unions must weigh the potential exposure when deciding to serve hemp businesses.”