In short, “no,” there have not been any new developments regarding marijuana. However, WBA expects buzz about potential legalization to pick up again soon. As marijuana becomes a hot topic once more, you might wonder what banks should do were it to become legalized. Additionally, as we get closer to the end of the year, when Wisconsin’s Hemp Program will begin its transition to a new program, it’s important to be prepared to adjust banks’ policies and procedures accordingly. This article is designed to present some thoughts that banks should consider and discuss internally over the coming months regarding both marijuana and hemp. 

As of publication of this article, marijuana remains unlawful on both a state and federal level. WBA will continue to monitor proposed legislation and report back to the membership of any new developments, but at this time, Wisconsin has not yet legalized marijuana. However, this doesn’t mean that banks should take a “head-in-the-sand” approach to marijuana-related businesses (MRBs). For example, recreational marijuana is legal in Illinois and Michigan. As such, Wisconsin banks might see MRBs searching for products at their institutions. Even if not, your institution should consider how it would react if marijuana were to be legalized in some capacity in Wisconsin. 

The first step in these considerations should be to determine whether bank will do business with MRBs. It will then want to develop policies and procedures accordingly. Regardless of policy, banks should also be prepared to identify whether a customer is an MRB. Thus, staff will need to be prepared to identify MRBs, to ask questions, and request additional documentation if necessary. That additional documentation will be what provides bank with the necessary information to determine whether its customer is in compliance with state laws, and, ultimately, whether bank is willing to do business with them. 

That documentation will vary depending on the marijuana laws of the state, and a bank will also likely want to prepare its own documentation to be completed by the customer. For example, WBA has created a Questionnaire and Certification to be incorporated into a bank’s account agreement when working with hemp-related businesses. In the event that marijuana were to be legalized in Wisconsin, in addition to providing further guidance on information to collect under any potential Wisconsin licensing and registration programs, WBA would consider creating similar documentation for MRBs. Banks will also want to consider Bank Secrecy Act (BSA) requirements. This means not only proper “know your customer” procedure, tailored to the uniqueness of the marijuana industry, but also appropriate risk-rating, and ongoing monitoring for compliance. 

It's worth mentioning at this point that the above is presented purely in the context of MRBs and marijuana, not hemp. Hemp that is grown and produced in Wisconsin in accordance with Wisconsin’s Hemp Program administered by the Department of Trade, Agriculture, and Consumer Protection (DATCP) is legal. Wisconsin banks should certainly develop policies and procedures with regard to banking hemp-related businesses, but those considerations would be separate, as legal treatment of hemp is distinct from marijuana. 

Regarding the transition of Wisconsin’s Hemp Program, banks should be aware that DATCP is currently in discussions with the U.S. Department of Agriculture (USDA) to consider whether to transition Wisconsin’s hemp program to USDA. This decision will be based on being able to provide hemp growers the greatest opportunity to produce hemp in Wisconsin. 

Nothing is changing for Wisconsin hemp licensees during the 2021 growing season. Growers will continue to work with DATCP on all harvest notifications, sample collection, and testing. 

Some of the benefits to hemp growers should the state shift to a federal-run program include no licensing fees and a three-year license instead of an annual one. 

Currently, three other states (Hawaii, Mississippi, and New Hampshire) and multiple tribal nations have federal-run hemp programs. Since state-run hemp programs must also meet federal requirements, Wisconsin’s hemp program is already in close alignment with USDA so a transition should not result in significant program changes for growers. Additionally, USDA will be able to communicate directly with growers for any federal rule changes. 

WBA will continue to monitor the situation of both hemp and marijuana within the state and update the membership accordingly. If you have any questions on this topic or other matters of compliance, contact WBA’s legal call program at 608-441-1200 or

MacKinnon is WBA vice president – legal.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance. 

By, Cassie Krause

We’re in the midst of July which means summer barbecue, fireworks, parades, and the newest celebration: hemp history week as of July 17-23. Hemp has quite the story throughout the history of Wisconsin, the Nation, and even worldwide. As one of the earliest plants to be cultivated, which continues to find new, modern-day applications, such a plant is perhaps worthy of its own week of celebration.

Hemp has only recently been made legal in Wisconsin. As many readers may recall, it was in 2018, with the implementation of Wisconsin’s pilot program, which still governs the growth and production of hemp today. Hemp’s history in Wisconsin started much earlier than the past few years and was grown in the early 1900s. With an ideal climate, large areas of soil well-suited to hemp culture, and an already firm agriculture industry, Wisconsin was one of the Nation’s top hemp producers by the 1940s. During World War 2 Wisconsin hemp was used to clothe American soldiers, as well as for cordage, tow, and calking in naval vessels.

Only recently have we seen the first Wisconsin hemp harvests in decades. As a relatively new crop, and industry overall, it’s been a learning process for farmers, business owners, and Wisconsin banks. Hemp is being used, as it has been for decades, for its fiber and oil for products such as clothing, rope, and extracts. Its uses are also being explored in modern applications such as hempcrete (a concrete alternative), biofuels, and hemp-infused drinks. In fact, as we emerge to enjoy the summer weather after the pandemic lockdowns, if you find yourself taking a stroll by the re-opened bars downtown, you might even sample a hemp-infused beer.

As the industry continues to develop, new growers may appear or expand their fields. Businesses may bring in new products or further develop their offerings. Innovators will explore new products, applications, and supply chains. If your bank has not already, it might expect to encounter a customer with some form of interest in hemp-related business in the future. Wisconsin banks provide a vital role in providing financial services and relationships to these businesses and individuals. Be it a farmer who is experimenting with a new crop, a small-business owner looking to bring in new products, or a multi-state producer with various lines of business, hemp-related businesses will be looking to Wisconsin banks to provide financial services to an industry that has not had access to such for decades.

Hemp month presents an opportunity to learn more about this historic, yet relatively new crop and the evolving industry. Banks might have seen, or may begin to see, new businesses within their communities. WBA has created numerous resources for those banks looking to learn more about the legality of hemp in Wisconsin, including a questionnaire and certification which is available through FIPCO.

If you have any questions on this topic or other matters of compliance, contact WBA’s legal call program at 608-441-1200 or

By, Ally Bates

Q: Is there a Legal Distinction Between Hemp and Marijuana?

A: Yes. With talks of marijuana legislation occurring once more, it’s important to remember that there is a legal distinction between hemp and marijuana. 

As of publication of this article, the growing and production of hemp is legal in Wisconsin (subject to certain requirements) while marijuana remains unlawful on both a state and federal level. A key component of this distinction is that the Agriculture Improvement Act of 2018 removed hemp from the definition of marijuana in the Controlled Substances Act. This paved the way for rulemaking which ultimately provided states the ability to implement their own programs. Wisconsin is one such State. 

Effective October 29, 2020, Wisconsin’s Hemp Pilot Research Program converted to the Hemp Program. The Hemp Program is consistent with the pilot program and allows Wisconsin’s hemp growers to plant, grow, and process hemp legally. Marijuana is not legal under this program. It’s also worth noting that hemp and marijuana are physically, and chemically different. While such a discussion is outside the scope of this article, it is important to understand that there is a difference. Just as a bank that works with farmers of various crops, or restaurants and bars, or steel mills and factories is likely to have some knowledge of the industry to better understand their relationship, it is important to become familiar with hemp, and, as its legality shifts in more states (such as the case recently in Illinois), marijuana. 

In short, a bank should have procedures in place to identify the extent to which a business is engaged in the growing or production of hemp or marijuana. If the business is engaged in the growing or production of hemp, bank should confirm whether it is done so legally, under Wisconsin’s Hemp Program. Because legal hemp is still a relatively new commodity, it can be difficult to know where to start, let alone in relation to marijuana. To the extent that you have any questions on the matter, do not hesitate to contact WBA Legal’s Scott Birrenkott at 608-441-1200 or

Birrenkott is WBA assistant director – legal. For legal questions, please email

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance. 

By, Alex Paniagua

FinCEN issues guidance regarding due diligence requirements

Q: Has there been clarification on BSA requirements for hemp-related businesses?

A: Yes. FinCEN recently issued guidance regarding due diligence requirements for hemp-related business customers.

On June 29, 2020 the Financial Crimes Enforcement Network (FinCEN) issued guidance on the requirements under the Bank Secrecy Act for hemp-related business customers. The guidance provides that, in addition to conducting customer due diligence (CDD) on hemp-related businesses at time of application, financial institutions must establish risk-based procedures for conducting ongoing CDD. Specifically, for customers who are hemp growers, financial institutions may confirm the hemp grower's compliance with state, tribal government, or the USDA licensing requirements, as applicable, by either obtaining:

1. A written attestation by the hemp grower that they are validly licensed, or

2. A copy of such license.

Financial institutions might also consider seeking additional information based upon their assessment of potential risk posed by each customer. FinCEN suggests that additional information might include crop inspection or testing reports, license renewals, updated attestations from the business, or correspondence with the state, tribal government, or USDA. It is important for financial institutions to know the nature of their customer's business to best determine the risk profile. 

The guidance also clarifies that because hemp is no longer a Schedule I controlled substance, financial institutions are not required to file a Suspicious Activity Report on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations.

Lastly, the guidance confirms that financial institutions must report currency transactions in connection with hemp-related businesses in the same manner they would for any other customers.

FinCEN Guidance

Birrenkott is WBA assistant director – legal. For legal questions, please email

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.

By, Amber Seitz

Wisconsin Banking Hemp Likely to Expand in 2020
Nearly 50% of bank respondents will extend banking services to hemp-related customers

MADISON – Nearly 50% of bank respondents who are currently not banking hemp said they will extend services to hemp-related customers in 2020 according to a recent Wisconsin Bankers Association (WBA) survey. 

WBA’s annual Bank CEO Economic Conditions Survey asked three hemp-related questions in addition to more traditional economic inquiries. The responses highlighted that many Wisconsin banks have been working through the complex regulatory issue of hemp and are now better prepared to assist their customers.

“Wisconsin’s community bankers strive to help their customers and communities. The reality is that hemp is a very new and complex issue from both a regulatory and business viewpoint,” explained Rose Oswald Poels, WBA President and CEO. “It takes time to work through these complexities. Because there is no one-size-fits-all approach, each bank’s approach and timeframe will be different.”

It was only within the last month that federal regulators issued their first guidance for banks regarding hemp banking. 

Thirty-eight percent of responding Wisconsin banks are currently accepting deposits from hemp-related businesses. In comparison, fewer banks, 15%, are lending to hemp-related businesses.

Some of the lack of participation by banks may be due to demand. Several participating bankers shared they haven’t had any customers request these services.

“Wisconsin continues to benefit from a very diverse banking industry which means consumers and businesses have the opportunity to find the banking relationship that is right for their unique needs,” said Oswald Poels. “We really encourage the public to keep reaching out to bankers until they find the right fit.”

There will be more banking opportunities for hemp-related businesses according to respondents. Forty-eight percent of bankers currently not offering services will do so in 2020. 

Banks aren’t the only businesses working through the issue of hemp. As a relatively new industry, there are still questions about the crop including cost, price, yield, returns, contracts, and markets. As the industry grows, the data needed for businesses and bankers alike to make decisions will increase and become easier to navigate from both a regulatory and operational viewpoint.

Community banks continue to be dedicated to working with their customers to find ways to help their businesses grow. A Wisconsin bank is always the safest place for Wisconsin consumers and businesses to entrust their money.

The survey was conducted over the first two weeks of December with 85 respondents. 

Below is a breakdown of the questions and responses.

Are you currently accepting deposits from hemp-related businesses?








Are you currently lending to hemp-related businesses?








If you are not currently banking hemp, will you do so in the next year?








By, Eric Skrum

Q: Has USDA Published a Rule Establishing Regulations to Produce Hemp?

A: Yes. 

The United States Department of Agriculture (USDA) published an interim final rule (rule) on October 31, 2019 specifying rules and regulations to produce hemp. The rule is directed by the Agriculture Improvement Act of 2018 and is effective October 31, 2019 through November 1, 2021. 

The rule establishes a Federal plan for producers in States that do not have their own USDA-approved plan. The program includes provisions for maintaining information on the land where hemp is produced, testing of THC levels, disposing of plants not meeting certain requirements, and licensing requirements. USDA has also outlined provisions to approve plans submitted by States for the domestic production of hemp. 

It is WBA's understanding that the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) will submit a Hemp Program Plan to USDA. However, DATCP will continue under the 2014 Farm Bill provisions in 2020. DATCP has begun its hemp licensing as of November 1, 2019, for the 2020 hemp season, and is waiting for the State Legislature to approve legislation to align Wisconsin law with the 2018 Farm Bill. At this time, DATCP expects to begin the new program under the 2018 Farm Bill in 2021.

Birrenkott is WBA assistant director – legal. For legal questions, please email

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.

By, Amber Seitz

The below article is the Special Focus section of the November 2019 Compliance Journal. The full issue may be viewed by clicking here.

The United States Department of Agriculture (USDA) published an interim final rule on October 31, 2019 specifying regulations to produce hemp. The rule is effective October 31, 2019 through November 1, 2021.


The rule establishes a Federal program for producers in States that do not have their own USDA-approved plan. The program includes provisions for maintaining information on the land where hemp is produced, testing of THC levels, disposing of plants not meeting certain requirements, and licensing requirements. USDA has also outlined provisions under which States may submit their own plans for approval.

It is WBA’s understanding that the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) will submit a Hemp Program Plan to USDA. However, DATCP will continue under the 2014 Farm Bill provisions, and existing Wisconsin regulation at time of this article’s publication, in 2020. As of November 1, 2019, DATCP has begun its hemp licensing for the 2020 hemp season. At this time, DATCP is is preparing to write rules to align Wisconsin law with the 2018 Farm Bill, and expects to begin the new program under the 2018 Farm Bill, and USDA’s rule, in 2021. 

This article discusses the procedural aspects for submission of a State plan to USDA under its interim final rule. It also discusses the Federal program requirements placed upon hemp producers. While these procedures and the program requirements do not directly apply to banks, they will affect how hemp businesses operate in Wisconsin, and thus, bank customers seeking to engage in hemp-related activity. This article presents selected aspects of the interim final rule for banks to better understand what to expect in the coming years and the requirements that may apply to their customers.

Procedural Aspects

From a procedural standpoint, WBA reminds readers that as of publication of this article, much remains to be decided. November 26, 2019 Governor Tony Evers signed 2019 Senate Bill 188 establishing a new hemp program. It requires DATCP to write and submit a plan to USDA for approval. After USDA receives the plan, it will either approve or disapprove the plan no later than 60 calendar days after receipt.

If DATCP proposes a plan and it is rejected by USDA, the interim final rule provides for amended plan procedures. Under those procedures, hemp production continues under the existing plan. For example, production in Wisconsin would continue under current rules while DATCP and USDA work out amendments to the proposed plan. However, if an amended plan is not submitted within one year from the effective date of the rejected new law or regulation, the existing plan is revoked. 

Note that as of publication of this article, the current DATCP program under ATCP 22 and 2017 Wisconsin Act 100 is still in effect. As discussed above, DATCP is currently issuing licenses for the 2020 season. If DATCP writes new rules under the new law, WBA will report on what banks need to know about the process.

USDA Plan Requirements

Because hemp production at the time of this article’s publication continues under existing Wisconsin law, and the future rule governing production is unknown, a full discussion of USDA’s rule and the Wisconsin bill would be premature. As such, this article will not discuss the Wisconsin bill which has yet to be signed by the governor. It will discuss USDA’s rule below, but from a conceptual standpoint rather than a full discussion. Note that the requirements as presented below have been edited to help banks understand their broader implications. As such, most technical requirements have been removed. For a full reading of the rule, please refer to the link at the end of this article.

A State plan must meet information collection requirements, to be reported to The Secretary of Agriculture of the United States regarding:

  1. Contact information for licensed producers;
    • A legal description of the land on which the producer will produce hemp including its geospatial location; and 
    • The status and number of the producer’s license or authorization. 
  2. A State plan must include a procedure for accurate and effective sampling of all hemp produced, requiring the following: 
    • Samples must be collected within 15 days prior to the anticipated harvest.
    • The method used for sampling must be within a level of 95% accuracy, that no more than 1% of the plants in the lot would exceed the acceptable hemp THC level.
    • During a scheduled sample collection, the producer or an authorized representative of the producer shall be present at the growing site. 
    • Representatives of the sampling agency shall be provided with complete and unrestricted access during business hours to all hemp and other cannabis plants, whether growing or harvested, and all land, buildings, and other structures used for the cultivation, handling, and storage of all hemp and other cannabis plants, and all locations listed in the producer license.
    • A producer shall not harvest the cannabis crop prior to samples being taken.
  3. The State plan must include procedures for testing that can accurately identify delta-9 tetrahydrocannabinol content concentration levels to specified levels and meet a specific methodology.
    • Any test resulting in higher than acceptable THC levels is considered conclusive evidence that the lot represented by the sample is not in compliance. Lots tested and not certified may not be further handled, processed or enter the stream of commerce and the producer shall ensure the lot is disposed of.
    • Samples of hemp plant material from one lot shall not be commingled with hemp plant material from other lots. 
    • Analytical testing for purposes of detecting the concentration levels of THC shall meet standards that are not presented in this summary.
  4. The State shall promptly notify USDA by certified mail or electronically of any occurrence of cannabis plants or plant material that do not meet the definition of hemp in this part and attach the records demonstrating the appropriate disposal of all of those plants and materials in the lot from which the representative samples were taken. 
  5. A State plan must include a procedure to comply with certain enforcement procedures.
  6. A State plan must include a procedure for conducting annual inspections of, at a minimum, a random sample of producers to verify that hemp is not produced in violation of this part. 
  7. A State plan must include a procedure for submitting a monthly report to USDA. All such information must be submitted to the USDA in a format that is compatible with USDA’s information sharing system. 
  8. The State must certify that it has the resources and personnel to carry out the practices and procedures necessary to comply.
  9. The State plan must include a procedure to share information with USDA.
    • The State plan shall require producers to report their hemp crop acreage to the Farm Service Agency. 
    • The State government shall assign each producer with a license or authorization identifier in a format prescribed by USDA. 
    • The State government shall require producers to report the total acreage of hemp planted, harvested, and, if applicable, disposed. The State government shall collect this information and report it to USDA. 

Final Takeaways

As expected, the rule requires testing, reporting, and monitoring to accurately identify whether hemp samples contain a delta-9 tetrahydrocannabinol (THC) content concentration level that does not exceed the acceptable level. To that extent, hemp is defined as the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a THC concentration of not more than 0.3 percent on a dry weight basis.

Another aspect to note is the rule’s use of the word “producer.” A producer is someone who is licensed or authorized to produce hemp, meaning to grow hemp plants for market, or for cultivation for market, in the United States. The rule does not distinguish between grower, producer, retailer, or any other type of hemp-related business. As such, it will remain important to see what DATCP proposes for categories of regulation in its rule.


While hemp businesses in Wisconsin still operate under DATCP’s current rule at time of this article’s publication, it is important to understand the track Wisconsin is currently on, and what possibilities the future holds, in order to prepare accordingly. WBA will continue to monitor and report on future hemp regulation as it continues to develop.

Click here to view USDA’s interim final rule.

By, Ally Bates

The below article is the Special Focus section of the October 2019 Compliance Journal. The full issue may be viewed by clicking here.

On January 1, 2020, recreational marijuana becomes lawful in Illinois, making it the eleventh state in the country to legalize marijuana for recreational use. When Illinois Public Act 101-0027 was enacted this past June, Illinois also became the second state bordering Wisconsin to legalize marijuana for recreational use, second to Michigan where licenses will begin being issued next month. Marijuana legalization in neighboring states raises the following question: Can a Wisconsin bank lawfully bank marijuana-related businesses (MRB)1 that operate in states where recreational marijuana is legal? 

State v. Federal Legality

To answer that question, it requires an understanding of the current legal landscape. At a state level, individuals and businesses acting consistent with state law requirements (e.g. licensure, age restrictions) will be deemed lawful actors within the state. However, current federal law muddies the waters regarding whether those individuals and business are acting entirely lawfully. This is because marijuana is still unlawful on the federal level – the Controlled Substances Act (CSA) characterizes marijuana as a Schedule I Controlled Substance and makes it illegal under federal law to manufacture, distribute, dispense, or possess marijuana. Technically speaking, then, individuals acting consistent with state marijuana laws are violating federal law. But, you ask, why don’t we often hear of lawful state actors being penalized by federal law enforcement officials?

Enter the Cole Memo. On August 29, 2013, then-Attorney General James Cole issued a Memorandum (the “Cole Memo”) in response to several states legalizing marijuana. The memo, in so many words, defers enforcement of marijuana-related activity to the states that have enacted laws legalizing marijuana in some form. The Cole Memo sets forth a number of federal enforcement priorities pertaining to marijuana including, for example, preventing the distribution of marijuana to minors, preventing violence and use of firearms in the cultivation and distribution of marijuana, and preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels. Outside of the enforcement priorities delineated in the Cole Memo, the federal government will rely, as it has traditionally relied, on “states and local law enforcement agencies to address marijuana activity through enforcement of their own narcotics laws.”

After the issuance of the Cole Memo, individuals and businesses could act pursuant to state marijuana laws without fear of prosecutorial action from the feds, assuming their actions did not implicate an enforcement priority indicated in the Cole Memo. That “relief” was short-lived, however, as on January 4, 2018, then-Attorney General Jeff Sessions rescinded the Cole Memo. The Cole Memo remains rescinded today. In practice, however, the spirit of the Cole Memo appears to live on, as the rescission issued by Attorney General Sessions continued to provide “prosecutorial discretion.” 

Thus, in summary, though recreational marijuana may be lawful at the state level, it remains unlawful and subject to enforcement action at the federal level. In practice, however, it is clear that federal law enforcement officials do not necessarily prioritize taking enforcement action against individuals and businesses acting consistent with state marijuana laws.

BSA Responsibilities

Of course, the legality question is a relevant one for banks because of Bank Secrecy Act (BSA) obligations. As banks, it’s imperative that you meet your (BSA) obligations, consistent with your Customer Due Diligence (CDD) program. In short, the bank must ensure that the transactions conducted through the bank are not derived from illegal activity. As described above, however, transactions flowing through an MRB are, very clearly, derived from illegal activity.
Recognizing the precarious position of financial institutions and the practical realties of having an unbanked yet burgeoning MRB population, the Financial Crimes and Enforcement Network (FinCEN) issued guidance entitled “BSA Expectations Regarding Marijuana-Related Businesses” on February 14, 2014 (“FinCEN Guidance”). The FinCEN Guidance, which is still alive and well today, leaves direction to banks to determine whether to provide financial services to MRBs, but indicates that customer due diligence is a “critical aspect” of this determination. To this end, the FinCEN Guidance delineates financial institutions’ due diligence responsibilities when banking MRBs. Specifically, it outlines requirements including, for example, verifying state licensure and registration and reviewing associated documentation, requesting information about the MRB and related parties from state licensing and enforcement authorities, developing an understanding of the normal and expected activity of the business, and conducting ongoing monitoring. 

In addition, the FinCEN Guidance outlines the obligation of financial institutions to file Suspicious Activity Reports (SARs) on activity involving MRBs, which, according to the Guidance “is unaffected by any state law that legalizes marijuana-related activity.” If a bank is providing financial services to an MRB, the bank must file one of the following types of SARs, consistent with FinCEN’s suspicious activity reporting requirements and related thresholds:

  • “Marijuana Limited” 
  • “Marijuana Priority”
  • “Marijuana Termination”

Determining which type of SAR to file is described within the FinCEN Guidance. In summary, the determination is based on whether or not Cole Memo priorities are implicated (despite its rescission) and if the account activity leads the bank to terminate the relationship with the customer. 

Finally, the FinCEN Guidance notes that a bank’s Currency Transaction Reporting (CTR) responsibilities are unaffected by the fact that a customer is deemed an MRB.

Banks planning to provide financial services to MRBs should familiarize themselves with the obligations outlined in the FinCEN Guidance.

Regulator Considerations

In addition to the criminal liability risks and practical considerations that a bank must consider in weighing the decision to bank MRBs, the regulator risk must also be weighed. Based on our current understanding the various regulators’ position on banking MRBs, the direction is to “follow FinCEN Guidance.” Thus, assuming the bank is following the FinCEN Guidance and has followed applicable policies and procedures, one would assume enforcement action would be avoided. 

To the extent your bank is considering providing financial services to MRBs, I suggest getting in touch with your regulator for guidance. 

So, What Do I Do?

The head-in-the-sand approach to banking MRBs is not a good one, as the issue will eventually present itself if it hasn’t already. Thus, I suggest banks take the following actions:

  • Consider whether your answer to “will you bank an MRB?” is a “yes (under certain circumstances)” or “no”. Develop policies and procedures accordingly and as necessary. 
  • Regardless of your policy, it’s important to know if your customer is an MRB; thus, you should ask. If the customer is an MRB and your policy says you won’t bank them, don’t bank them. If your policy is that “yes” (you will consider banking the MRB), you need additional information before you should bank or continue banking the self-identified MRB.
  • That additional information is information and documentation that allows the bank to determine whether or not the customer is in compliance with state law. Such collection will typically take the form of a Questionnaire and Certification and will require supporting documentation from the customer. Information will vary from state to state and any such information collection documentation should be developed in consultation with counsel who is familiar with the marijuana laws of the state.
    • If, based on the bank’s reasonable due diligence, the customer appears to be in compliance with state law at account-opening or when the bank confirms compliance of an existing customer, I suggest the following:
      • Designate the customer as “High Risk”. Consistent with such designation, continue to monitor your MRB customer for compliance with state law on an ongoing basis; and
      • Follow FinCEN Guidance. This includes monitoring the account for the presence of red flags identified in the FinCEN Guidance and filing SARs as appropriate. 
  • In contrast, if, based on the bank’s reasonable due diligence, the customer appears to NOT be in compliance with state law, the activity is unlawful and inconsistent with FinCEN Guidance. Accordingly, I do not suggest banking the customer.

The Future

The good news is that we only anticipate greater clarity as time marches on. Such clarity could come with enactment of the Secure and Fair Enforcement Banking Act of 2019 (“SAFE Banking Act”), which has already cleared the Senate and is now in the hands of the House. In summary, the Act would provide protections for financial institutions that provide financial services to legitimate cannabis-related businesses and services providers. The Act would allow banks to serve cannabis-related businesses without fear of adverse action from the regulators or criminal liability. The Act would not eliminate the need for banks to make policy decisions and draft implementing policies and procedures pertaining to MRBs, but it would certainly reduce ambiguity and provide protections that bankers need to feel comfortable serving this clientele.  Stay tuned on the SAFE Banking Act and/or other possible legislative fixes to the precarious relationship between the banker and the MRB.

1A marijuana-related business (MRB) is not a defined term, though it has been used in various guidance issued by federal agencies. Questions remain regarding whether a business needs to “touch the plant” to be considered an MRB (e.g. grower, processor, or retailer) or if MRB would include parties accepting monies from MRBs (e.g. landlords, vendors, or suppliers). This definitional question is one for the bank to grapple with, possibly in consultation with regulators, until additional clarification is provided.

WBA wishes to thank Atty. Lauren C. Capitini, Boardman & Clark, llp for providing this article.

By, Ally Bates

Got questions on banking customers engaged in hemp-related activities in Wisconsin? 

FIPCO has developed a form that helps your bank ask the right questions and obtain the documentation needed to determine if your customer is complying with Wisconsin law. This form specifically provides a list of questions staff should be asking as well as a Certification that may provide your financial institution with additional comfort in banking these customers.

This questionnaire will benefit: 
Loan Officers, BSA officers, Compliance Officers, Corporate decision-makers

Annual Cost (fillable PDF)

  • WBA Member: $195 
  • Non-WBA-Member: $235
  • FIPCO Compliance Concierge Software User: complimentary (accessed through Blank Forms at This complimentary form will be included directly in the software soon.

NOTE: The annual cost of the form includes free updates and revisions, should they be made to the form.

What does the Hemp Questionnaire and Certification provide to my bank? 

  • A document solution for banking participants in the hemp industry. 
  • A list of questions to ask the Applicant in order to make decisions about the risk level in banking the Applicant 
  • Documentation the bank should consider obtaining when banking participants in the hemp industry 
  • Additional comfort in banking these parties

How will it directly help my bank? 
Provides the framework of questions to ask and documentation available to make determinations about whether the Applicant should be banked, consistent with your financial institution's policies and procedures.

Why should my bank purchase the Hemp Questionnaire and Certification?

  • This document distills Wisconsin law into a pragmatic document solution that allows you to ask the right questions and obtain the documentation necessary to determine whether the Applicant is complying with Wisconsin law. 
  • It asks questions that are relevant in determining whether your financial institution and/or the Applicant are in compliance with all applicable laws and regulations. 
  • It's flexible and can be customized to be consistent with your policies and procedures. Contact for more information.

Buy now! Contact

By, Amber Seitz