Financial institutions wary of helping businesses in hemp industry due to confusion over regulations
WISCONSIN DELLS, Wis. (CBS 58) – The hemp industry is growing rapidly in Wisconsin but those who produce or sell hemp products are running into issues with banks and financial institutions.
In May, CBS 58 reported on Beyond Full Spectrum, a Waukesha business that sells hemp products like CBD and how a credit union they worked with closed their account.
Their institution, Summit Credit Union, told them they legally could not consider working with a business that sells hemp or CBD because they could be out of compliance with state and federal laws.
It’s an industry-wide issue that the Wisconsin Bankers Association is trying to address. On Wednesday, the WBA hosted an event called Banking on Hemp at a conference center in Wisconsin Dells. The purpose of the event is to help inform banks about the hemp industry and how they can navigate the new landscape.
“Bankers are in a very complex position from a regulatory standpoint both on the state and federal level,” said Lauren Capitini, an attorney with Boardman & Clark Law Firm in Madison.
Experts at the event say since the hemp industry is unfamiliar to many banks, there is hesitancy and confusion about how they can get involved with those businesses from both financial risk and legal compliance considerations.
“Banks are very heavily regulated,” said Scott Birrenkott with the Wisconsin Bankers Association. He added that banks and financial institutions want to make sure they are up to the standards set at the state and federal level when dealing with their customers.
“Because this area is so new, there isn’t a lot of guidance or clarity on what those standards are,” Birrenkott said. “Leaving banks forced to come up with them on their own, even though there are going to be government officials coming in and examining them on that.”
But despite the confusion, experts at the event say the financial sector does want to get involved with the developing industry and as they are better informed, producers and sellers of hemp products will be as familiar as any other business they interact with.
“We do see some concerns from bankers” Capitini said. “But there is of course excitement and wanting to be able to facilitate this growing industry and serve their communities.”
An earlier version of this story referred to Summit Credit Union as a bank, not a credit union. This version of the story has been updated to reflect the correct term.