MADISON (WKOW) — The Wisconsin Bankers Association hosted a panel discussion with members about financial institutions’ concerns over whether it is legal to accept hemp customers and their business deposits.
The plant is mostly used for cloth, fuel, and CBD oil and the industry is growing rapidly in Wisconsin.
WKOW first reported last month hemp growers and the owners of several CBD stores had their bank accounts closed after their credit union said it was unclear about the laws governing hemp and banking.
Wisconsin is in the middle of a pilot program to research industrial hemp. It issues licenses to grow industrial hemp and process it into products. While state law allows financial institutions to accept customers that grow, sell or produce hemp, banks currently don’t have clarity from the state or federal regulators on how to treat these customers.
“Right now all the states are still in the pilot program, so that makes sense to have some people a little nervous,” said Jennifer Heaton-Amrhein from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). “Lenders and other people in the marketplace are going to be more comfortable with hemp and they’re going to see it as a more legitimate opportunity.”
Senator Patrick Testin (R – Stevens Point) is working on legislation to find a framework for bankers to use when accepting a hemp customer. He’s also considering whether retailers who sell CBD products should get licenses as well to show banks their business is legal. DATCP currently only issues licenses to growers and producers.
“I’m hoping you guys get some more customers out of this to be honest with you,” said Testin. “The more we can legitimize this industry, the better we’re going to be able to help this industry grow and thrive.”
In 2017, Wisconsin implemented their own 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.
Members on the panel are asking banks to use their best judgment to accept a hemp customer or not.
“Some banks might want to ask very little information because they are comfortable with it and maybe they understand the hemp industry because of their location,” said Scott Birrenkott, Wisconsin Bankers Association (WBA). “We’re dealing with our general good faith bank secrecy act, know your customer regulations.”
Last year a poll by WBA showed 17% of its members were interested in accepting hemp customers. Since then Birrenkott said the number continues to grow.
“It’s definitely a sign that they’re thinking about it and others might not have a big agriculture presence, so they might not be as familiar with it and have more questions for their customers.”