By Laura Bianchi, Rose Law Group Partner and Director of Cannabis Department | Cannabis Business Executive
On August 19, 2019, the National Credit Union Association (NCUA), a federal agency that regulates, charters, and supervises federal credit unions, released updated guidance on federally-backed credit unions working with hemp-based businesses. The guidelines clarify that credit unions are permitted to offer financial services, including loans, to businesses dealing in the realm of hemp or hemp-based products such as manufacturers, distributors, shippers and retailers, among others. This announcement comes shortly after reports of hemp-based businesses losing access to financial services and credit card processing in recent months.
Last April, Evalon, a payment processing subsidiary of the U.S. Bank, announced that it would stop working with businesses who deal with CBD, a hemp-derived chemical compound. Soon after Evalon’s announcement, other financial institutions followed suit, leaving many established business owners scrambling to find alternative providers and would-be entrepreneurs unable to join the space without access to banking or credit card processing.