The latest CBD news summary from this week are here:
- Presidential candidate Sen. Micheal Bennet’s hemp banking letter got response from Federal agencies this week
- Sen. Chuck Schumer is also urging federal regulators to ensure the accessibility of banking services by hemp businesses
- Drug schedule system is being criticized by An FDA official for the lack of available research on CBD
Response To Sen. Michael Bennet Banking Letter By Federal Agencies
Federal agencies have replied to a letter sent by Senator Michael Bennet (D-CO), a 2020 presidential candidate, requesting elucidation on financial services for hemp businesses.
These replies were
The responses were absolute to Marijuana Moment by Sen. Bennet’s office.
The initial letter was sent to Federal Reserve, Farm Credit Administration (FCA), Federal Deposit Insurance Corporation (FDIC),National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) in June.
The responses from each agency are here:
FCA
Jeffery Hall, acting CEO, told Sen Bennet that the new guidance had been provided to “System institutions” by FCA.
Basically, the guidelines outlines our expectation that take into account relevant growing conditions, federal and state laws, and marketing opportunities for System institutions to expand underwriting standards for hemp production and processing.
Hall ended his letter by saying that the development of the hemp program by USDA would be monitored and new guidance will also be released if needed.
The Federal Reserve
Chairman Jerome Powell said that there is no current plan to issue the guidance to this area by the board, because we are expecting that institutions will apply their established policies, practices and procedures to their hemp industry buyers, but this issue will be monitored by us.
OCC
Comptroller of the Currency Joseph Otting gave similar reply to Powell, Chairman of the Federal Reserve.
Otting said that the OCC has no current plan to issue guidelines regarding this area as we anticipate OCC-supervised banks to put in their established policies, practices, and procedures to legal hemp farmers and producers.
FDIC
Jelena McWilliams, Chairman of FDIC, said that FDIC had received questions about the changes made with the 2018 Farm Bill, but some of those questions were out of the jurisdiction of her agency.
McWilliams wrote that they had taken a number of steps to inform financial institutions and their appraisers about the changes.
McWilliams said that they had discussed the changes made by the 2018 Farm Bill with community bankers in meeting of their advisory community, held on March 28, 2019, for community banking, and she had personally discussed these changes during banker outreach meetings both in Washington, D.C. and across the country.
McWilliams assured that they will carry on to maintain a dialogue with the institutions we administer to strengthen this policy concerning the provision of services to authorize hemp businesses.
NCUA
Sen. Bennet’s apprehension about hemp processors and farmers lacking access to financial services was shared by Chairman Rodney Hood.
Hood wrote that farmers and processors across the country will be better enable to have full access to the system to make investments in businesses and create jobs.
Hood continued by saying that the uncertainty for financial institutions will likely remain, unfortunately, until the Department of Agriculture completes their guidelines and regulations for this program.
It is planned by USDA to release its guidelines for hemp for the growing season of 2020.
Hood wrote that NCUA was working on possible future regulations to financial institutions in this area, and they were discussing with FinCEN and other federal banking agencies.
Several members of Congress have shown their concern to federal agencies regarding the deficiency of financial services accessible to hemp businesses, including Senate Minority Leader Chuck Schumer and Senate Majority Leader Mitch McConnel.
Requests For Clarity On Hemp Banking By Sen. Chuck Schumer
Chuck Schumer, senate minority leader (D-NY), has sent a letter to fedral financial regulators in which he has requested clarity for hemp businesses.
Sen. Schumer, like Sen. Bennet, sent this letter to the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve.
Sen. Schumer has supported hemp for some time.
He was a cosponsor of the hemp legalizing Hemp farming act of 2018, and he recently gained funding to build the only hemp seed bank in the nation.
In a press release Sen. Schumer said that the hemp industry is increasing day by day all over the Upstate New York, with new businesses like Main Street Farms popping up left and right, that is why he found it so hard to take away the troublesome and outdated regulations from this industry by passing the Hemp Farming Act of 2018. Nevertheless, if these businesses aren’t financed from a bank or aren’t able to find a credit card processor that doesn’t charge them an arm and a leg, none of that matters all that much.
He has discussed the changes rendered by the 2018 Farm Bill but records that the financial institutions are still in skepticism and have continued to question whether they can expand their services to hemp-related businesses.
Sen. Schumer writes that it is important that financial institutions acknowledge hemp as a legal agricultural industry as assigned in the 2018 Farm Bill. He urges OCC, Federal Reserve, and the FDIC to provide guidance and best practices to the institutions, that are looking to serve hemp farmers and businesses, under their authority.
DRUG SCHEDULING IS BLAMED BY FDA FOR LACK OF RESEARCH ON CBD
During the National Industrial Hemp Council’s 2019 Hemp Business Summit, an FDA official criticized the drug schedule system related to CBD.
Lowell Schiller, the FDA Principal Associate Commissioner for Policy, said “This is part of the legacy of almost all CBD being a Schedule I controlled substance until late last year. It was difficult to research, and it hasn’t been studied nearly as much as we would like.”
Schiller was speaking about the current rule making process of the FDA to establish a structure for CBD and the challenges the agency has faced.
He also observed many questions that are still approaching, such as which quantity of CBD is suitable to take, how it interacts with drugs, and if it could affect pregnancy.
Schiller said that these are important questions and their answers will help to move forward. That’s why early on at FDA, they had recognized that they would had to focus on different CBD: collect better data to make wise and informed decisions about cannabidiol.
He continued by saying that they wanted to learn as much as they can, as quickly as they can, to support the efficient and informed decision making. Moreover, they wanted to see the data or studies relevant to the safety of particular uses of CBD. And if there were any deficiency in their knowledge, they wanted to understand how big those gaps were and what could be done – by them and by others – to start filling those gaps.
Schiller repeated that the agency had the plan to provide an update on its progress in the fall.
He ended by saying “We are working hard to play our role at FDA, but we need your help. It needs to accept more responsibilities – for the protection of buyers, and for the future development of an industry that can meet the same requirements as apply to other industries regulated by us. We anticipate to work together as this industry continues to grow.
