The American Bankers Association today recommended several changes to the U.S. Department of Agriculture’s interim final rule that would facilitate banks offering services to hemp growers and hemp-related businesses. The rule was issued in October to establish regulations and procedures for the legal production of industrial hemp, as required by the 2018 Farm Bill, which reclassified hemp as a legal agricultural commodity.
Specifically, ABA said that banks should be able to access the USDA database of licensed hemp growers to verify the legitimacy of anyone applying for a bank product or service and added that hemp licenses should remain in effect for the duration of the growing period and through harvest, along with other requests for clarity. ABA also recommended a more flexible approach to testing for tetrahydrocannabinol, or THC, potency, noting that USDA’s restrictions would make it impossible for some growers to access approved test facilities, and the association urged greater flexibility with growers whose hemp inadvertently passes the rule’s 0.3% THC threshold.
The USDA regulations provide a framework for how it will approve regulatory plans from states and Indian tribes that wish to oversee hemp production, as well as a federal plan for producers in areas without approved local plans. Meanwhile, the federal banking agencies and the Financial Crimes Enforcement Network made clear in December that banks are not required to file Suspicious Activity Reports on hemp producers operating under a USDA-approved license or plan solely because they are growing hemp.