In early December, the Board of Governors of the Federal Reserve System and others issued new guidance for hemp banking to clarify the legal status of commercial hemp production and requirements for financial institutions under the Bank Secrecy Act (BSA).
Among other things, the new guidance exempted banks from having to file Suspicious Activity Reports (SAR) for customers in the hemp industry who abide by regulations.
The Wisconsin Bankers Association (WBA) on Monday revealed the results of a recent survey in which close to half of the responding bankers in the state who are not currently extending services to hemp-related customers plan to do so in 2020.
On its annual Bank CEO Economic Conditions Survey, WBA asked three hemp-related questions, in addition to more traditional economic ones.
According to the responses, many banks in Wisconsin have managed to work through hemp’s complex regulatory issues and are now more adequately prepared to serve their customers.
Forty-eight percent responded that they plan to offer financial services to hemp businesses next year.
“Wisconsin’s community bankers strive to help their customers and communities,” says WBA president Rose Oswald Poels. “The reality is that hemp is a very new and complex issue from both a regulatory and business viewpoint. It takes time to work through these complexities. Because there is no one-size-fits-all approach, each bank’s approach and timeframe will be different.”
According to WBA, 38 percent of responding banks currently accept deposits from hemp-related businesses, while fewer than 15 percent of the banks are choosing to lend them money.
WBA says that the lack of participation may be partially explained by demand as several of the participating bankers indicated that they have not had any customers from hemp-related businesses request financial services.
Poels encourages the public to reach out to bankers until they find the right match, stating that, as Wisconsin continues to benefit from the diverse banking industry, consumers and businesses have the opportunity to find the right banking relationship for their specific needs.
A total of 85 respondents participated in the survey, which WBA conducted during the first two weeks of December.