Last week, the Financial Crimes Enforcement Network (FinCEN), issued new guidance (the “FinCEN Guidance”) for financial institutions working with hemp-related businesses. The FinCEN Guidance centers on due diligence requirements as related to the Bank Secrecy Act (BSA). This guidance follows closely on the new National Credit Union Administration (NCUA) guidance for federally-chartered credit unions, which was issued on June 20 (see our take here).
The FinCEN Guidance is not the Network’s first bite at the apple. Last December, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, FinCEN and the Office of the Comptroller of the Currency, in consultation with the Conference of State Bank Supervisors, issued a three-page hemp banking statement. The purpose of that statement was to to help financial institutions deal with BSA and anti-money laundering (AML) compliance in light of the fact that hemp is no longer a Schedule I controlled substance under federal law. The FinCEN Guidance clarifies and expands upon the 2019 statement.
Under the 2019 hemp banking statement, the biggest win for financial institutions was probably the fact that no special or enhanced Suspicious Activity Report (“SAR”) filings are required for customers “. . . because they