Banks are no longer required to file SAR on legal hemp customers

At 10 a.m. Wednesday, four federal agencies, in conjunction with state bank regulators, issued a joint release clarifying the legal status of hemp growth and production and the relevant requirements under the Bank Secrecy Act (BSA) for banks providing services to hemp-related businesses.

The statement, issued by the Federal Reserve Board, the Federal Deposit Insurance Corporation, FinCEN,  and the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors, signals the beginning of an end to banking loopholes and freezes for legal hemp businesses.

“Because hemp is no longer a Schedule I controlled substance under the Controlled Substances
Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely
because they are engaged in the growth or cultivation of hemp in accordance with applicable
laws and regulations.”

The statement, attached, provides banks with background information on the legal status of hemp, the U.S. Department of Agriculture’s (USDA) interim final rule on the production of hemp, and the BSA considerations when providing banking services to hemp-related businesses.

   

In coming weeks the Financial Crimes Enforcement Network (FinCEN) will issue additional guidance  for hemp related banking after further review and evaluation of the USDA interim final rule.