CBD News Roundup: Federal Agencies Reply to Sen. Bennet’s Hemp Banking Letter

cbd news: federal agencies reply to michael bennet hemp banking letter

Here is the latest CBD news from this week:

  • Federal agencies responded to presidential candidate Sen. Michael Bennet’s hemp banking letter this week
  • Sen. Chuck Schumer is also urging federal regulators to ensure hemp businesses can access banking services
  • An FDA official is criticizing the drug schedule system for the lack of available research on CBD

Federal Agencies Reply to Sen. Michael Bennet’s Hemp Banking Letter

Federal agencies have responded to a letter sent by Senator Michael Bennet (D-CO), a 2020 presidential candidate, requesting clarification on financial services for hemp businesses.

The responses were exclusively provided to Marijuana Moment by Sen. Bennet’s office.

The initial letter was sent in June to the Farm Credit Administration (FCA), Federal Reserve, Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA).

Here are the responses from each agency:

FCA

Acting CEO Jeffery Hall told Sen Bennet that the FCA had recently provided new guidance to “System institutions.”

Essentially, the guidance “outlines our expectation for System institutions to develop underwriting standards for hemp production and processing that take into account applicable federal and state laws, growing conditions, and marketing opportunities.”

Hall ended his letter by saying that the FCA would monitor the USDA’s development of the hemp program and release new guidance if needed.

The Federal Reserve

Chairman Jerome Powell said, “The Board does not currently plan to issue guidance specific to this area, because it is our expectation institutions will apply their established policies, procedures and practices to their hemp industry customers, but we will continue to monitor this issue.”

OCC

Comptroller of the Currency Joseph Otting responded similarly to Chairman Powell of the Federal Reserve.

“The OCC does not currently plan to issue guidance specific to this area because we expect OCC-supervised banks to apply their established policies, procedures, and practices to legal hemp farmers and producers. Nevertheless, we will continue to monitor this issue,” Otting wrote.

FDIC

Chairman Jelena McWilliams said that the FDIC had received questions about the changes made with the 2018 Farm Bill, but that some of them were out of her agency’s jurisdiction.

“Nevertheless, we have taken a number of steps to inform financial institutions and our examiners about the changes,” McWilliams wrote.

“For example, we discussed the changes provided by the 2018 Farm Bill with community bankers during the March 28, 2019 meeting of our Advisory Committee for Community Banking, and I have personally discussed the changes during banker outreach meetings both in Washington, D.C. and across the country,” said McWilliams.

“You have my assurance that we will continue to maintain a dialogue with the institutions we supervise to reinforce this policy regarding the provision of services to legal hemp businesses,” concluded McWilliams.

NCUA

Chairman Rodney Hood shared Sen. Bennet’s concern about hemp farmers and processors lacking access to financial services.

“Full access to the system will better enable these farmers and processors across the country to make investments in their businesses and create jobs,” wrote Hood.

“Unfortunately, until the Department of Agriculture completes their regulations and guidelines for this program, the uncertainty for financial institutions will likely remain,” Hood continued.

The USDA plans to release its regulations for hemp in time for the 2020 growing season.

“The NCUA is working on possible future guidance to financial institutions in this area, and we are consulting with FinCEN and other federal banking agencies,” Hood wrote.

Several members of Congress have voiced concern to federal agencies about the lack of financial services available to hemp businesses, including Senate Majority Leader Mitch McConnel and Senate Minority Leader Chuck Schumer.

Sen. Chuck Schumer Requests Clarity on Hemp Banking

Senate Minority Leader Chuck Schumer (D-NY) has sent a letter to federal financial regulators requesting clarity for hemp businesses.

Like Sen. Bennet, Sen. Schumer sent his letter to the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

Sen. Schumer has been a hemp supporter for some time.

He was a cosponsor of the Hemp Farming Act of 2018 that legalized hemp in the 2018 Farm Bill, and he recently secured funding to build the only hemp seed bank in the nation.

“The industrial hemp industry is seeding and growing all over Upstate New York, with new businesses like Main Street Farms popping up left and right, which is why I fought so hard to strip the burdensome and outdated federal regulations from it by passing the Hemp Farming Act of 2018. However, if these businesses aren’t able to get financing from a bank or find a credit card processor that doesn’t charge them an arm and a leg, none of that matters all that much, said Sen. Schumer in a press release.

In his letter, he discusses the changes provided by the 2018 Farm Bill but notes that “financial institutions have continued to question whether they can extend their services to hemp-related businesses.”

“It is important that financial institutions recognize hemp as a legal agricultural industry as set forth in the 2018 Farm Bill,” Sen. Schumer writes. “I urge the FDIC, Federal Reserve, and OCC to provide guidance and best practices to the institutions under their authority that are looking to serve hemp farmers and businesses.”

FDA Official Blames Drug Scheduling for Lack of Research on CBD

An FDA official criticized the drug schedule system concerning CBD during the National Industrial Hemp Council’s 2019 Hemp Business Summit.

“This is part of the legacy of almost all CBD being a Schedule I controlled substance until late last year. It was difficult to research, and it hasn’t been studied nearly as much as we would like,” said Lowell Schiller, the FDA Principal Associate Commissioner for Policy.

Schiller was speaking about the FDA’s current rulemaking process for establishing a framework for CBD and the challenges the agency has faced.

He also noted several questions that are still looming, such as how much CBD is appropriate to take, how it interacts with drugs, and if it could affect pregnancy.

“These are important questions, and the answers will help to inform our path forward. That’s why early on at FDA, we recognized that if we were going to make wise and informed scientific decisions about cannabidiol, we would have to start focusing on a different CBD: Collect Better Data,” said Schiller.

We want to learn as much as we can, as quickly as we can, to support informed and efficient decision making. If there are data or studies that are relevant to the safety of particular uses of CBD, we want to see them. And if there are gaps in our knowledge, we want to understand how big those gaps are and what can be done – by us and by others – to start filling them,” he continued.

Schiller reiterated that the agency intends to provide an update on its progress in the fall.

“We’re working hard to do our part at FDA. But we need your help. As this industry matures, it needs to start taking on more responsibilities – for the safety of consumers, and for the future development of an industry that can meet the same requirements as apply to other industries we regulate,” he ended. “We look forward to working together as this industry continues to mature.