Credit Unions Can Now Lend to Hemp Farmers, Following Tester Push
New guidance cuts red tape, provides clarity for hemp producers and financial institutions
U.S. Senator Jon Tester announced today that federally insured credit unions may now provide financial services to legally operating hemp businesses and farmers under a new guidance published by the National Credit Union Administration (NCUA). This decision comes after months of efforts by Tester to reduce burdensome regulations and provide clarity for Montana hemp producers.
“This is a strong step toward cutting through the red tape that’s slowing down Montana hemp farmers,” Tester said. “I’m going to keep fighting to make sure our state’s hemp producers can access the resources that will help them create jobs and grow their businesses.”
Currently, financial institutions are required to file suspicious activity reports (SARs) for transactions suspected of being derived from illegal activities, creating a legal gray area for hemp producers and businesses. However, NCUA’s new guidance provides clarity by lifting the SAR requirement for hemp farmers and instructing businesses to prove they are participating in a state hemp program, allowing credit unions to deliver banking services to hemp producers.
This is the first time a federal regulator has explicitly clarified that hemp producers and businesses can access financial services.
Earlier this spring, Tester successfully pushed Customs and Border Protection (CBP) to update their hemp guidance to allow Montana producers to purchase their hemp seeds from Canada. Prior to Tester's efforts, farmers were not allowed to purchase hemp seeds.
Montana farmers have been growing hemp through a limited pilot program since 2014 because the crop was still considered a controlled substance until late last year. In December, Tester helped pass the 2018 Farm Bill, which removed hemp from the Drug Enforcement Agency's list of controlled substances, making it legal to grow industrial hemp in the U.S. pending the Department of Agriculture's (USDA) approval.
However, the USDA refused to issue a federal plan or approve Montana’s state plan, forcing farmers to grow under the 2014 pilot program. Tester called out USDA Secretary Sonny Perdue over the agency's failure to give Montana farmers the green light to plant hemp this growing season. Tester was the first member of Montana's Congressional delegation to ask federal agencies to address this issue in a March 12 letter to USDA Secretary Perdue and sent his latest letter on this issue to CBP Acting Commissioner Sanders earlier this spring.