The National Credit Union Administration (NCUA) has issued guidance to credit unions serving hemp-related businesses, which were made legal under the Agriculture Improvement Act of 2018 (2018 Farm Bill).[1]  The guidance is contained in the NCUA’s June 2020 Letter to Credit Unions and August 2019 Regulatory Alert.

The 2018 Farm Bill removed hemp[2] from Schedule I of the Controlled Substances Act[3] and directed the USDA to establish a regulatory framework for hemp production in the United States.  The USDA issued an interim final rule[4] in October 2019, which outlined the minimum standards for hemp production.  Hemp producers must obtain either a valid USDA-issued production license or approval from a USDA-approved state to be lawful.

Not every state has received approval of their production plans from the USDA.  Information on each state’s production plan can be found here.  Notably, the USDA rule only applies to production, and there is no uniform federal or state system for regulating other facets of the hemp industry such as manufacturing, processing, distribution, and retail.  Each state is responsible for establishing its own guidelines in these areas and for monitoring compliance.

The NCUA has confirmed that it does not prohibit credit unions from offering banking services, including loans, to lawfully operating hemp-related businesses and recognizes the opportunities that hemp brings to the agriculture sector.  However, the NCUA encourages credit unions to thoughtfully consider whether they can properly serve hemp-related businesses.  This includes adopting appropriate due diligence policies as part of its overall BSA/AML compliance program and reporting any potential money laundering, illegal, or suspicious activity as recommended in the June 2020 FinCEN Guidance.


[1] Pub. L. 115-334.

[2] The term “hemp” is defined in the 2018 Farm Bill as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” 7 U.S.C. 1639o(1).

[3] 21 U.S.C. § 812.

[4] 84 FR 58522.