On Tuesday, the FDIC told Banking Dive that within a week, the Federal Deposit Insurance Corp. (FDIC), The Office of the Comptroller of the Currency (OCC), the Federal Reserve and Financial Crimes Enforcement Network are developing interagency guidance on hemp banking for hemp-related businesses.
The FDIC also said that last week after the U.S. Department of Agriculture issued the draft rules, the bank regulators also hatched a plan to release their interagency guidance soon.
Hemp is a strain of the cannabis plant whose THC levels must remain below 0.3%. It was legalized under the 2018 Farm Bill. However, banks are still questioning whether they can do business with businesses associated with hemp.
Lawmakers, farmers, and banks looking to service the hemp industry will soon receive hemp banking rules from the FDIC.
Financial institutions have called for the regulators to resolve the issue with guidance as they are still not sure if they should extend banking services to the hemp industry. Hemp businesses are still facing resistance when it comes to opening bank accounts for their companies, said the Democratic Senators Michael Bennet and Chuck Schumer.
In a meeting held with various state officials, the FDIC Chair, Jelena McWilliams, asked about applications and how the THC levels in hemp are regulated and maintained below the stipulated 0.3% threshold. She also noted that bankers are in a bind where hemp banking is concerned.
McWilliams told the Banking Dive that the more she talked with the state officials, the more she understood how THC levels in hemp are being regulated. She further noted that she has been at the forefront of the regulatory efforts to develop a guide that will direct the financial institutions on how to conduct hemp banking.
The decision to issue financial institutions with a hemp banking guide is a continuation of the responses issued previously by regulators. However, the statement released in August by the OCC and Fed did not clarify on the hemp-banking guidance issue.
Senator Bennet wrote a letter to the regulators asking for clarity, but Jerome Powell, the Fed Chairman, and Joseph Otting, the Comptroller of the Currency, said that their agencies have no plan of issuing guidance.
Powell and Otting said that financial institutions should apply their already established policies on the hemp industry. They further said that their agencies, OCC and Fed, would continuously monitor hemp banking practices.
Although she did not indicate if the FDIC would issue guidance, McWilliams responded to Bennet’s letter and said that the FDIC was in the process of training the examiners because hemp is now legal and flagging of suspicious activities as was previously directed by the Financial Crimes Enforcement Network (FinCEN) for marijuana is no longer applicable to hemp.
Hemp industry analysts strongly believe that the news that banking guidance wil soon be available comes as good news to companies like Green Hygienics Holdings Inc. (OTCQB: GRYN) and Hemptown USA since the industry will no longer struggle to get baking services.
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