With Evalon closing its CBD merchant accounts, what’s next for the uncertain Evalon, a subsidiary of U.S. Bank? Today, the institution pulled out of all CBD business accounts.
Evalon had quietly began offering merchant services to hemp-derived CBD businesses last fall that allows a business to accept secure credit card or debit card transactions. The Bank has given client companies a 45-day grace period to continue doing business and to find a new financial alternative. All applications still in the underwriting process have reportedly been canceled. The “decision” is still left to interruption, but the fact remains --- fear rules common sense. Indeed, much has happened since Evalon embraced CBD banking last November: Congress passed the 2018 Farm Bill, and the outgoing FDA commissioner has publicly wobbled on how hemp-derived CBD products will (or won’t) be regulated. Uncertainty abounds, and financial channels are caught in the middle.
Again we had “told-you-so-moment,” and not surprised if all the banks have taken notice that Evalon got into it gingerly and exited quickly.
Not an encouraging moment for banks providing essential services to the CBD hemp industry. Just like the days after prohibition – you would have believed that the federal government should have been ahead of the curve! Now what? SAFE Banking Act, which has 138 co-sponsors in the U.S. House of Representatives are pushing the bill with honest vigor. The bill would protect financial institutions that are working with cannabis business clients, is set for a markup in the House Financial Services Committee next week. Encouraging news, but no cigar!