Four federal agencies in conjunction with the state bank regulators issued this week a statement clarifying the legal status of hemp growth and production and the relevant requirements under the Bank Secrecy Act (BSA) for banks providing services to hemp-related businesses.
The statement emphasizes that banks are no longer required to file suspicious activity reports (SAR) for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures and file a SAR if indicia of suspicious activity warrants.
This statement provides banks with background information on the legal status of hemp, the U.S. Department of Agriculture’s (USDA) interim final rule on the production of hemp, and the BSA considerations when providing banking services to hemp-related businesses.
This statement also indicates that the Financial Crimes Enforcement Network (FinCEN) will issue additional guidance after further reviewing and evaluating the USDA interim final rule.
The statement was jointly issued by the Federal Reserve, FDIC, FinCen, OCC and CSBS. Banks can contact the USDA, state departments of agriculture, and tribal governments with further questions regarding the Agriculture Improvement Act of 2018 (2018 Farm Bill) and its implementing regulations.
There is one more chance for you to participate in the 2020 Community Bank Case Study Competition. The competition deadline for statements of interest has been extended to December 9.
This Year’s Topic
This year’s competition will focus on the impact of the Bank Secrecy Act and Anti-Money Laundering requirements on community banks. Student teams will examine compliance challenges, associated time and costs and identify potential regulatory reforms.
The annual competition is open to undergraduate students in all fields of study as an opportunity to gain valuable first-hand knowledge of the banking industry. Student teams partner with local community banks to conduct original case studies.
Each student member and faculty advisor of the first-place winning team will receive a $1,000 scholarship and be invited to present at the CSBS-Federal Reserve-FDIC Community Banking in the 21st Century Research and Policy Conference. Their work will be published in the CSBS Journal of Community Bank Case Studies. Teams that place second and third will also receive scholarships and have their works published in the journal.
Today's Guest: Alisha Sears, CSBS Senior Analyst, Policy Development
CSBS, the FDIC, and the Fed have this annual conference every year about community banks. And we get together these brilliant economist, and statisticians, and we even do a poll! A poll of community banks all across the country. And we look at all the data and research, and it’s pretty informative.
But we also learned pretty quickly that we weren’t capturing everything that was going on. Community banks are local, just like these local interviews that I’ve slowly learned to appreciate.
So we started doing a sort of “Vox Pop” of our own, focused just on community bankers, and we call it “Five Questions for Five Bankers.”
Today, I have on an expert from CSBS who works with the state regulators that gather the feedback from bankers across the country, summarizes, and publishes it for the conference. Some of what they say can be seen in data we have, and some of what they say is pretty surprising.
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