Hemp, Opioid Guidance Issued

August 22, 2019 at 9:24 am Leave a comment

 

Two recently issued guidance documents, one from FINCEN the other from NCUA, are intended to provide assistance  to credit unions and other financial institutions in ensuring  that their BSA programs appropriately address the impact of these drugs on banking services. I’ll leave it up to you to decide for yourselves how helpful you actually find them.

First, there is the interim guidance issued by the NCUA providing an update and overview of the legality of providing hemp-related banking services. The guidance was issued as NCUA and other banking regulators face increasing pressure from Members of Congress who continue to hear complaints from home state hemp farmers in states like Kentucky that banking services are still difficult to secure.

The confusion on the part of the famers stems from the fact that late last year Congress included removing hemp from the Schedule I list of controlled substances in the 2018 Farm Bill. However, even though hemp is no longer on the list, the Department of Agriculture is responsible for promulgating regulations outlining the responsibility of states and Indian tribes that wish to make hemp production legal.

Furthermore, under the 2018 law, states have the right to decide whether or not hemp is going to be legal in their jurisdictions. Nothing can really happen without the Department of Agriculture coming out with the regs. Of course, Congressmen could simply explain that to their constituents, but it’s so much easier to push the blame onto banking regulators and their lawyers.

By the way, let’s remember that hemp is not cannabis, even though it is a closely related cousin. As a result, even when hemp is being legalized, an important part of your compliance mission will be to make sure that you are dealing with companies providing legal hemp products and not companies trying to sneak illegal cannabis in through the back door.

The second guidance, issued by FIN-CEN, is intended to give financial institutions assistance in detecting and reporting suspicious activities related to opioid production and distribution. It does this by highlighting the red flags commonly associated with the sale of these drugs “by Chinese, Mexican and other foreign suppliers.”

On that note, enjoy your day.

Entry filed under: Compliance, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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