Washington, D.C. – This week, Colorado U.S. Senator Michael Bennet sent a letter pressing federal financial regulators to provide guidance to financial institutions so that hemp producers and processors can gain access to the banking system. Despite the removal of hemp as a Schedule 1 drug last December following passage of the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), many growers and processors are still unable to access financial services due to a lack of clarity from regulators.
“In my home state of Colorado, farmers cultivated hemp on over 21,000 acres of land last year,” Bennet wrote. “Nonetheless, farmers generally continue to lack access to the banking system even though hemp is no longer a Schedule 1 drug.”
In his letter to Federal Reserve Chairman Jerome Powell, U.S. Treasury Comptroller Joseph Otting, Farm Credit Administration Acting CEO Jeffrey Hall, Federal Deposit Insurance Corporation Chairman Jelena McWilliams, and National Credit Union Administration Chairman Rodney Hood, Bennet urged the agencies to provide the clarity necessary for hemp farmers and processors to access the financial services afforded to comparable crops and agricultural products.
“It is my hope that your agencies can work both expeditiously and in a coordinated manner to issue guidance describing how financial institutions can offer financial products and services to hemp farmers and processors,” Bennet wrote.
Bennet, a member of the Senate Committee on Agriculture, Nutrition, and Forestry, worked to include a pilot program for hemp growers in the 2014 Farm Bill, which paved the way to secure legalization of the crop in the 2018 Farm Bill. Last Congress he led the Hemp Water Rights Act and called on the Department of Justice not to interfere with hemp cultivation or act against financial institutions that handle related funds. Bennet and Sen. Jon Tester (D-MT) wrote to the Bureau of Reclamation in January 2019 urging the agency to update its policies in accordance with the 2018 Farm Bill to ensure hemp growers can access water and irrigate their crops. In their response to the Bennet-Tester letter, the Bureau of Reclamation said: “Because hemp was removed from the Controlled Substances Act list of controlled substances, it is no longer subject to the policy and therefore Reclamation is able to provide water for hemp cultivation in accordance with current law.”
A copy of the letter is available HERE and below.
Dear Chairs Powell, McWilliams, Hood, Acting CEO Hall, and Comptroller Otting:
I write to request that you work expeditiously to provide guidance to financial institutions on serving the hemp industry so that producers can obtain access to the banking system.
As you know, the Agricultural Improvement Act of 2018 (P.L. 115-334) (hereinafter, “the 2018 Farm Bill”) removed hemp from the definition of marijuana under the Controlled Substances Act, excluding it as a Schedule 1 drug. Accordingly, the 2018 Farm Bill allows individuals to farm, process, and sell hemp so long as they are doing it in a manner consistent with the 2018 law. The 2018 Farm Bill also creates a regulatory program under the Department of Agriculture.
Hemp cultivation and processing is already working to support rural communities across the country. Forty-five states have enacted hemp laws and producers are currently growing it in twenty-three states. In my home state of Colorado, farmers cultivated hemp on over 21,000 acres of land last year. Nonetheless, farmers and processors generally continue to lack access to the banking system even though hemp is no longer a Schedule 1 drug.
It is my hope that your agencies can work expeditiously and in a coordinated manner to issue guidance describing how financial institutions can offer financial products and services to hemp farmers and processors. Access to the banking system will provide certainty and much needed clarity for our nation’s hemp farmers and related businesses. In addition, greater access to the banking system will make it easier for the USDA to regulate the commodity and conduct oversight of the program.
If you would like to discuss this further, please don’t hesitate to follow up with me. Thank you for your attention to this matter.
Michael F. Bennet
United States Senator