MADISON (WKOW) -- Financial institutions will no longer have to take extra steps in order to accept customers involved in the hemp industry.
Federal financial regulatory agencies set new guidelines that won’t require financial institutions to file suspicious activity reports for accounts associated with hemp. That’s because the crop is no longer on the Schedule 1 Controlled Substance list.
Wisconsin Bankers Association said this move was a long time coming after several financial institutions wanted more clarity on how to work with hemp businesses.
“It gives banks the certainty the regulators are aware of this and provides better expectations on how they can meet their requirements,” said Scott Birrenkott, Assistant Director at Wisconsin Bankers Association.
Birrenkott said this move will ease the burden on banks and hopes it encourages more to accept hemp businesses as new customers.
In 2017, Wisconsin implemented its hemp pilot program allowing producers and growers to legally sell hemp. Then the 2018 Farm Bill removed hemp from the controlled substance list allowing the state to continue to manage the program.
Since then some CBD, hemp businesses struggled to find banks to accept their money as some banks had concerns whether it's legal to accept them as customers.
Birrenkott said more financial institutions are warming up to the idea as more education is provided to the public.
A statement was issued earlier in the week by the Federal Reserve Board, the Federal Deposit Insurance Corporation, FinCEN, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors.
“Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations,” the memo states. “For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.”