Federal Regulators Ease Hemp Banking Protocols Following Crop’s Legalization
Federal financial regulatory agencies are clarifying that banks no longer have to take extra steps to track accounts for hemp-related businesses. Before hemp and its derivatives were federally legalized under the 2018 Farm Bill, financial institutions were required to file suspicious activity reports (SARs) for accounts associated with the crop because it was a Schedule I controlled substance treated the same as marijuana.
HIGHLIGHTS
- When deciding to serve hemp-related businesses, banks must comply with applicable regulatory requirements for customer identification, suspicious activity reporting, currency transaction reporting, and risk-based customer due diligence, including the collection of beneficial ownership information for legal entity customers
- Hemp was legalized almost a year ago, yet Oregon farmers and producers have been forced to ride the roller coaster of uncertainty
- Though financial institutions are still required to file SARs for marijuana businesses, the rate of those reports being submitted seemed to level off in the last quarter.
