Federal financial regulators on Monday released updated guidance for banks and credit unions that service hemp businesses.
The Financial Crimes Enforcement Network (FinCEN), which is part of the Treasury Department, said that the update is meant to expand on earlier guidance the agency provided following the federal legalization of hemp under the 2018 Farm Bill. The new memo explains changes in reporting requirements and emphasizes that because the crop is no longer a controlled substance, financial institutions don’t have to automatically flag transactions that are from hemp business accounts.
“This guidance explains how financial institutions can conduct due diligence for hemp-related businesses, and identifies the type of information and documentation financial institutions can collect from hemp-related businesses to comply with [Bank Secrecy Act] regulatory requirements,” FinCEN wrote. “This clarification is intended to enhance the availability of financial services for, and the financial transparency of, hemp-related businesses in compliance with federal law.”