04 Dec 2019
Banks are no longer required to file suspicious activity reports on customers who cultivate hemp, industry regulators said.
A group of financial regulators on Tuesday clarified the compliance requirements for banks whose customers produce hemp, a variety of the cannabis plant that is often used for its fiber and generally doesn’t get people high.
Suspicious activity reports identify potential criminal activity or transactions, which banks file to the U.S. Treasury Department’s financial crimes unit. Until recently, hemp production largely was banned under federal law.
A farm bill signed into law last year by President Trump removed hemp from a list of federally controlled substances. The legislation also directed the U.S. Agriculture Department to regulate domestic production of the crop.
Banks are still required to file reports on customers in the hemp business if they suspect suspicious activity, regulators said. The Treasury’s Financial Crimes Enforcement Network will issue additional guidance after further evaluation of the USDA’s rules governing hemp production, regulators said.
FinCEN made the announcement along with the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors.
Financial services companies have faced compliance challenges in recent years as they navigate evolving—and frequently conflicting—state and federal laws regarding the treatment of cannabis products.
By Kristin Broughton, The Wall Street Journal, 3 December 2019
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