Following last year’s passage of the 2018 Farm Bill, the National Credit Union Administration (NCUA) issued a regulatory update in August of 2019 to federally insured credit unions. Citing growth in hemp-related commerce, the NCUA emphasized the need for credit unions to understand the gamut of regulation across jurisdictions in order to lend lawfully to hemp-related businesses. Within its memorandum to members, the NCUA provided: 1) a summary of repercussions generated by the 2018 Farm Bill, 2) specific compliance program concerns with regard to the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML), and 3) considerations under existing NCUA regulations for lending.
As to the effects of the 2018 Farm Bill, the NCUA highlighted three points. First, as of December 20, 2018, hemp is no longer designated as a federally controlled substance. The industrial hemp pilot provisions under an earlier 2014 Farm Bill govern the lawful production of hemp; noncompliant production remains illegal. Under the 2018 Farm Bill, this pilot program will be terminated one year after the issuance of final hemp regulations and guidelines from the USDA. Second, the NCUA cautioned that notwithstanding these federal developments, state and Indian Tribe laws may still prohibit the production or possession of hemp. Yet, it also noted that states and Indian Tribes laws cannot prohibit the transportation of products produced lawfully under federal law. Last, the 2018 Farm Bill does not modify other existing statutes, including the Federal Food, Drug, and Cosmetic Act and Public Health Service Act, and existing regulations thereof. Nor does the bill affect the authority of the Health and Human Services Secretary or FDA Commissioner to promulgate new regulations under existing statutory powers.
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