Banks are no longer required to file suspicious activity reports (SAR) for customers solely because they are legally growing hemp, according to a statement published Tuesday by federal banking agencies, federal law enforcement and state regulators.
However, banks will continue to be required to file the SARs for hemp-related customers, like all customers, if “indicia of suspicious activity warrants,” the agencies said.
The statement was filed jointly by the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Conference of State Bank Supervisors (CSBS). The Treasury’s Financial Crimes Enforcement Network (FinCEN) also signed the statement.
The National Credit Union Administration (NCUA) issued similar clarification in August for federally insured credit unions.
Tuesday’s statement also indicated that FinCEN will issue additional guidance after reviewing and evaluating the U.S. Department of Agriculture’s (USDA) interim final rule on the production of hemp, issued in October. That interim rule established new procedures for the legal production of industrial hemp, as required by the Agriculture Improvement Act of 2018. The law reclassified hemp as a legal agricultural commodity. The USDA rule provided a “standardized framework” for how the agency will approve regulatory plans from states and Indian tribes that wish to oversee hemp production, as well as a federal plan for producers in areas without approved local plans.
The framework covered how to maintain information on the land where hemp is produced, test THC levels, and dispose of plants that do not meet the necessary requirements. The rule also addresses licensing requirements and compliance.