A Federal Reserve Board nominee faced some sharp questioning Wednesday over the Fed’s treatment of hemp farming.
When Montana Democratic Sen. Jon Tester asked Michelle Bowman, a nominee of President Donald Trump for another Fed term, if Fed regulators had told banks that they could work with hemp growers and suppliers who work with them, Bowman responded, “We have not told them that they cannot bank them.”
Bowman was testifying at a confirmation hearing at the Senate Banking, Housing and Urban Affairs Committee.
“Let’s be proactive about it,” Tester said, adding he understood why banks wouldn’t lend to the hemp industry without assurances from regulatory agencies.
“I would agree with you, and we would not discourage banks from banking these types of customers,” Bowman said. “We’ll try to clarify that hemp is not an illegal crop.”
Congress is considering a handful of measures to address a similar problem in the nascent legalized marijuana industry, including a bill (HR 1595) that would provide a safe harbor to banks working with state-authorized cannabis businesses, and another (S 1028) that would effectively lift federal drug regulations off individuals complying with state marijuana laws.
Neither bill in their current form would address the hemp industry’s own banking headaches.
Niels Lesniewski contributed to this report.