On August 19, 2019, the National Credit Union Administration (NCUA) issued a regulatory alert to credit unions on serving hemp businesses. The regulatory alert, 19-RA-02, provides interim guidance in advance of forthcoming United State Department of Agriculture regulations and guidelines for hemp. In the alert, NCUA states “lending to a lawfully operating hemp-related business is permissible.” Credit unions must adhere to NCUA Rules and Regulations Part 723 and the member business loan requirements. Credit unions must also have a Bank Secrecy Act (BSA) program that addresses the risks associated with providing services to hemp businesses. Proper member due diligence processes are important. Note that if the activity is not unusual for a hemp-related business, it will not be necessary to file Suspicious Activity Reports.

 

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.