Credit Unions Receive Guidance from NCUA on Serving Hemp Businesses Amid COVID-19
- The NCUA has provided guidance to credit unions who are serving hemp businesses during the coronavirus pandemic.
- In a letter sent earlier this week, the NCUA outlined the Domestic Hemp Production Program created by the USDA and provided more details on the interim final rule.
- Officials of the NCUA are urging credit unions to “stay current with the federal, state, and Native American tribal laws and regulations.”
The National Credit Union Administration (NCUA) and its officials have provided additional information in regard to serving legal hemp businesses that have been affected by the COVD-19 pandemic. A letter that was issued this week outlines the way that hemp businesses have been impacted by the coronavirus, and urges that it is “important that credit unions stay current with the federal, state, and Native American tribal laws and regulations that apply to any hemp-related businesses they serve.”
Officials of the NCUA reminded leaders that hemp was removed from the Controlled Substances Act under the 2018 Farm Bill and was directed to the U.S. Department of Agriculture (USDA) to create a regulatory structure for hemp production in the United States. The letter provided details on the USDA’s Domestic Hemp Production Program and described the interim final rule and what that can mean for hemp growers.
“While USDA must approve state or tribal plans before they are implemented, the interim final rule does not preempt or limit any law of a state or Native American tribe that regulates the production of hemp and is more stringent than the 2018 Farm Bill,” read a section of the letter.
“The rule also establishes a federal plan to license, monitor, and regulate hemp production in states or territories of Native American tribes that do not prohibit hemp production and do not have their own USDA-approved plan.”
The NCUA also included a frequently asked questions section, and covered topics such as:
- Where it is legal to produce hemp
- What business types are covered under the interim final rule
- The current status of the interim final rule
- The FDA’s requirements for CBD
- States or tribes lacking a USDA-approved production plan
- Requirements for lending and working with hemp businesses
Other Laws Still Apply
The NCUA made sure to acknowledge that the U.S. Food and Drug Administration (FDA) has re-stated that “even if a CBD product meets the definition of ‘hemp’ under the 2018 Farm Bill…, it must still comply with all other applicable laws, including the FD&C Act.”
The Food, Drug, and Cosmetic Act (FD&C) prohibits the infusion of CBD into food and beverages. According to the letter, claims made by businesses selling the CBD product “will determine whether or not the subject businesses are violating the FD&C Act and other applicable federal regulations around consumer products and consumer safety.”
Overall, the NCUA is urging credit unions to carefully consider whether or not they are capable of safely serving a lawfully operating hemp business. They must acknowledge all the laws and regulations that apply to hemp companies, and understand the “complexities and risks involved.”
Hemp-related business questions should be directed to federal and state authorities.