This month, the National Credit Union Administration (the “NCUA”) issued guidance to federally insured credit unions for banking hemp businesses. The guidance provides some parameters for credit unions banking hemp businesses.
The NCUA guidance requires any credit union providing services to hemp businesses to conduct due diligence on hemp businesses, and ensure that there is no money laundering, or other illegal or suspicious activity. The guidance also requires credit unions to confirm that hemp businesses are operating lawfully under state and federal law, including lawful products. This could interfere with banking services for some CBD businesses due to the FDA’s position, echoed by several states, that CBD is prohibited in foods and dietary supplements. Hemp businesses applying for banking with a credit union should be prepared to provide state licenses and ownership documentation, and other documentation requested by the credit union, to demonstrate this compliance.
Credit unions regulated by the NCUA may now lend money to lawfully-operating hemp businesses. Nothing in this guidance or the law requires any credit union to make a loan, but this guidance clarifies that such loans are permissible under federal law. All loans for hemp businesses must still meet underwriting standards and comply with applicable NCUA rules and regulations like any other business loan.
If you need help with compliance advice, with responding to documentation requests from a credit union, or if you have questions about the legality of your products, please contact the attorneys at McAllister Garfield to make an appointment.
You can find the NCUA guidance here: NCUA Serving Hemp Businesses
A significant portion of McAllister Garfield’s work involves providing services to the hemp/CBD industries, including 50-state surveys of hemp laws, regulatory opinion letters on the legality of hemp, import/export issues, label reviews, business startup, regulatory compliance and real estate work. If you would like to discuss banking or any other topic in hemp/CBD, please contact me at your convenience.