Bank Regulators Ease SAR Requirements for Hemp-Related Businesses
Bank Regulators Ease SAR Requirements for Hemp-Related Businesses
April 15, 2020

Banks are no longer required to file suspicious activity reports (SARs) for customers engaging in the growth or cultivation of hemp. Under the 2018 Farm Bill, hemp has been reclassified.

DEFINITION OF HEMP

The 2018 Farm Bill now defines hemp as a variety of cannabis that contains .3% or less tetrahydrocannabinol (THC).

By doing this, the Board of Governors of the Federal Reserve System removed hemp from being classified as a Schedule 1 controlled substance under the Controlled Substances Act (CSA) by amending the CSA’s definition of marijuana to exclude “hemp.”

HEMP & BANKING

Ballard Spahr L.L.P. states that, “due to the reclassification of hemp, banks are now open to banking hemp-related businesses just as any other law-abiding industry.”

While this reclassification will ease the burden of reporting requirements and make it easier for banks to service hemp-related businesses, it does not affect legal marijuana or cannabis businesses. According to The New York Times, “The federal government still considers marijuana to be illegal, and even local banks have been too worried about getting in trouble to deal with them.”

The Secure and Fair Enforcement Banking Act (SAFE Banking Act) was passed by the House of Representatives on September 25, 2019.

“To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes.”

The Act is currently under review with the Senate and if passed would allow banks to provide further support through checking accounts and credit.

COMPLIANCE SERVICES

If you are a hemp-related business and would like compliance support, our experts are available for a consultation.

(855) 922-4325

support@CapitalComplianceExperts.com

About the Author

Kyle Oden
Director of Business Development

Over 12 years of experience consulting medium to large clients on their individual compliance needs. Proficient in working with Financial Service Centers, Money Transmitters, Casinos, Tribal Entities, Banks and Lending Businesses.

I am a Bay Area sports fan, have a passion for playing soccer, enjoy drawing and love spending time with my family.

Posted in: Compliance News, Financial Services News
Tags: , , , , , , , , , , , ,
Blog RSS Feed

Email Signup

Recent Posts

Categories

Archives

Tags

AML Annual Compliance Oversight Anti Money Laundering Automated Transaction Monitoring Bank Secrecy Act BSA BSA/AML Programs CAMS CAMS-Audit Capital Compliance Experts Capital Retail Solutions CFPB Check Cashing Technology CMS Compliance Consulting Compliance Employee Training Compliance Management Portal Compliance Management System COVID-19 Custom Anti-Money Laundering Programs Cybersecurity Financial Services Financial Services Center FinCEN KYC Money Service Business Money Transmitters MSB NY DFS OFAC Online Employee Training Online Workshop On POinT Training Paycheck Secure Payday Lending Red Flags Regulatory Compliance Risk Assessment SAR SBA Small Business Administration State Compliance State Licensing Third Party Independent Reviews Webinar