Officials from the National Credit Union Administration have outlined additional information on serving legal hemp businesses.
A letter issued this week points out that hemp-related businesses have also been affected by the COVID-19 pandemic and that it is “important that credit unions stay current with the federal, state and Native American tribal laws and regulations that apply to any hemp-related businesses they serve.”
Federal credit union officials remind leaders that the 2018 Farm Bill removed hemp from the Controlled Substances Act and directed the U.S. Department of Agriculture to establish a national regulatory framework for hemp production in the U.S. The NCUA sent a similar statement to its membership last August.
The letter described the USDA’s Domestic Hemp Production Program and outlined the provisions of the interim final rule and what it means for hemp producers.
“While USDA must approve state or tribal plans before they are implemented, the interim final rule does not preempt or limit any law of a state or Native American tribe that regulates the production of hemp and is more stringent than the 2018 Farm Bill,” the NCUA letter stated.
The NCUA also provided answers to frequently asked questions about working with hemp producers including:
- Status of the interim final rule
- Where hemp production is legal
- What happens if states or tribes do not have a USDA-approved plan
- Responsibility for compliance with state and tribal production plans
- Types of businesses covered under the interim final rule
- FDA requirements for CBD products
- FinCEN guidance and filing suspicious activity reports
- Requirements for serving hemp businesses, including lending and deciding whether to work with hemp businesses
In December, federal banking officials, including the Financial Crimes Enforcement Network, filed a joint statement notifying banks that they are no longer required to file suspicious activity reports (SARs) for customers who grow hemp in accordance with applicable laws and regulations.
Regarding the U.S. Food and Drug Administration’s requirements for CBD products, the NCUA said the FDA has reiterated that “even if a CBD product meets the definition of ‘hemp’ under the 2018 Farm Bill…,it still must comply with all other applicable laws, including the FD&C Act.”
Claims made about CBD products by businesses and the decision to infuse CBD into food, beverages and dietary supplements “will determine whether or not the subject businesses are violating the FD&C Act and other applicable federal regulations around consumer products and consumer safety,” the letter said.
The NCUA said credit unions should carefully consider whether they can safely and properly serve lawfully operating hemp businesses within their fields of membership and that they must be aware of all of the laws that apply to hemp businesses, and the “complexities and risks involved.”
Officials recommended credit union leaders who have questions about hemp-related businesses should consult qualified counsel and the appropriate federal and state authorities.