Question: Do credit unions need to incorporate the issue of marijuana-related businesses into their BSA policies and training?
Answer: Yes, credit unions should discuss cannabis-related businesses (both marijuana and hemp) in their Bank Secrecy Act policies, procedures, and training sessions.
Addressing this issue is necessary to show an understanding of risk, customer due diligence, reporting requirements, and general BSA compliance tied to a rapidly growing industry desperately seeking banking services.
Hemp is legalized at the federal level and is legal in Texas, Oklahoma, and Arkansas. Hemp IS cannabis. “Cannabis” is the general name for the plant and can be categorized as hemp cannabis (low THC) or marijuana cannabis (higher THC). As a result, all financial institutions MUST address whether (and how) they will serve hemp businesses that are operating legally throughout the Cornerstone region. If they do choose to serve hemp-related businesses, they need to address what the credit union will do if the hemp tests “hot” (higher THC) by regulators and is then considered marijuana.
It may be that a credit union policy is relatively simple and says it will NOT serve either marijuana-related businesses or hemp-related businesses. If that is the case, they need to address how they will handle complications when presented with such issues. Occasionally, a cannabis-related company will not tell you what they do, so how does the credit union intend to do due diligence on its potential members? Because there is substantial risk involved, credit union examiners will look at this issue and want to see that the board and management have done their due diligence, risk analysis, and planning for compliance.
Oklahoma and Arkansas have legalized medical marijuana at the state level, and Texas has legalized limited medical marijuana (this includes a cap of THC at 1%). Therefore, these marijuana-related businesses are operating legally under state law, and they need somewhere to do their banking. They will approach credit unions for services, and credit unions need a plan on how to handle this.
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