The Senate Minority Leader Chuck Schumer (D-NY) has written a letter to different federal regulators of the financial sector asking them to release an update to their guidelines to banks and other financial institutions regarding access to financial services by companies in the hemp and CBD industries.
While the 2018 Farm Act legalized hemp and its derivatives, farmers and other actors in the hemp and CBD industries still face major challenges when they want to open bank accounts or access other financial services, such as credit card processing and loans for their businesses.
This state of affairs has prompted Sen. Schumer to write a letter to the Federal Deposit Insurance Corporation-FDIC, the Federal Reserve and the OCC (Office of the Controller of Currency).
In his letter, Schumer notes that the hemp industry is in its infancy and is poised for major growth, but all the available opportunities will amount to nothing if the industry still finds it hard to get loans or find affordable credit card processors.
Schumer is an avid supporter of the hemp and CBD sectors, having played a leading role in the passing of the Farm Bill of 2018, as well as playing a key role in bringing an industrial hemp park to New York from where hemp will be grown and processed into products that are ready for the market.
Schumer’s letter isn’t the first to financial regulators. Other lawmakers, such as Sen. Michael Bennet (D-CO) also wrote a similar letter in June this year. Congress has also been applying pressure so that financial regulators clarify to banks that it is safe for them to work with the CBD and hemp industries.
Schumer specifically notes that smaller businesses are the most impacted by the regulatory grey area. For example, some employees of CBD companies have said that they cannot get loans from banks simply because they work for a CBD company.
He therefore requests that regulators clarify that hemp and CBD businesses are legitimate and should therefore be treated in the same way by banks as other legal businesses are treated. He also wants the regulators to provide guidance which will help financial institutions to conduct a risk analysis of CBD businesses that apply for credit or other services.
Industry pundits believe the voices of lawmakers calling on federal financial regulators to clarify that CBD businesses are welcome to industry actors like Youngevity International Inc. (NASDAQ: YGYI) and Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) since the potential of the industry can only be realized when there are no regulatory bottlenecks in the way of industry players.
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