Feds: Hemp Businesses Can Use Credit Unions
A breakthrough in banking for the cannabis industry? Sort of.
Hemp, marijuana’s taxonomically identical twin and the source material for the CBD products found anywhere there is money to be made in America, is legal — but not 100% legal.
Last year’s Farm Bill very explicitly legalized the cultivation, production, and sale of industrial hemp — look, see, there is Sen. Mitch McConnell waving a hemp pen! — but many hemp farmers and entrepreneurs are suffering the cannabis treatment despite dealing with a product that is legal in 50 states (and advertised for sale on Amazon, and almost everywhere else).
Facebook and Instagram are rejecting hemp businesses’ ads. Police and highway patrol are intercepting their interstate shipments. And banks, credit-card companies, and payroll firms are refusing their business — not because the federal government was threatening financial-services companies, but (and please bear with us) because the federal government wasn’t explicitly saying it was OK to do business with a legal business, despite U.S. senators and other bigwigs asking them very nicely to say it.
As of Monday, after promising to say, publicly, that hemp businesses are legal and financial institutions can take their money, the feds are saying this.
As Marijuana Moment reported, the National Credit Union Administration, a federal agency that regulates and ensures the for-profit banking alternatives, issued a press release in which it clarified that credit unions can in fact provide “certain financial services” to “lawful hemp businesses.”
Sort of like how they do with every other lawful business!
“Credit unions will be able to provide the customary range of financial services for business accounts, including loans, to hemp businesses within their fields of membership,” according to the agency’s press release.
All a hemp business needs to do in order to go to the credit union and come away with a loan or a credit union account is follow the law. All the credit union needs to do is make sure that their prospective client is doing so (verifying that the hemp business is in fact complying with the Farm Bill, for example) while also complying with federal laws requiring banking institutions to monitor client activity and report suspicious activity to the federal government.
Along with New York Sen. Chuck Schumer and Kentucky’s McConnell, Sen. Michael Bennet, a Democrat from Colorado and a presidential contender (insofar as he continues to qualify for debates), has been pestering federal agencies to provide some guidelines for baffled hemp businesses who find themselves turned down at the bank.
Monday’s guidance is “interim,” meaning that it will likely change once federal agencies like the United States Department of Agriculture issue updated guidelines on hemp production. In essence, saying for a second time, in very clear language that will please attorneys and risk-averse executives, that growing hemp in the U.S. is OK.
Of course, just because a credit union can do business with hemp farmers or producers doesn’t mean that they will. And in other to obtain the most favorable rates for a loan, hemp entrepreneurs would benefit from competition — like competition for their business from banks, who are still sitting on the fence, and who Schumer last week vowed he would continue to pressure.
As Marijuana Moment reported last week, most financial institutions will likely wait until Agriculture Secretary Sonny Purdue issues clarified rules sometime before next spring.
Why has this been so hard? Maybe for the same reason why the burgeoning hemp industry has apparently broken the brains and drug-testing kits of police and prosecutors in prohibition-minded areas. Cannabis is apparently confusing.
TELL US, do you bank with a credit union?