[Congressional Record Volume 165, Number 157 (Friday, September 27, 2019)]
[Extensions of Remarks]
[Pages E1228-E1231]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            SECURE AND FAIR ENFORCEMENT BANKING ACT OF 2019

                                 ______
                                 

                               speech of

                           HON. ED PERLMUTTER

                              of colorado

                    in the house of representatives

                     Wednesday, September 25, 2019

  Mr. PERLMUTTER. Madam Speaker, I include in the Record the following 
letters of endorsement for H.R. 1595, the SAFE Banking Act.
                                                   Law Enforcement


                                           Action Partnership.

     To: Chairwoman Maxine Waters and Members of the Subcommittee 
         on Consumer Protection and Financial Institutions
     From: Major Neill Franklin, Ret., on behalf of the Law 
         Enforcement Action Partnership (LEAP)
     Re: Challenges and Solutions: Access to Banking Services for 
         Cannabis-Related Businesses
     Hearing: Wednesday, February 13, 2019, 2:00 p.m.
     Position: Support
       Distinguished members of the Committee, thank you very much 
     for the opportunity to present the views of the Law 
     Enforcement Action Partnership (LEAP) in support of this 
     legislation.
       LEAP's mission is to unite and mobilize the voice of law 
     enforcement in support of drug policy and criminal justice 
     reforms that will make communities safer by focusing law 
     enforcement resources on the greatest threats to public 
     safety, promoting alternatives to arrest and incarceration, 
     addressing the root causes of crime, and working toward 
     healing police-community relations.
       ``LEAP envisions a world in which criminal justice and drug 
     policies keep our communities safer.'' This is a quote 
     directly from our website and that quote is exactly what this 
     hearing is about. It is about enacting policy that will 
     dramatically enhance public safety in our communities.
       This hearing is not, nor should it be, a hearing about 
     whether we should legalize, regulate, and control marijuana 
     for adult use. It should be clear to everyone here that 
     Americans have already decided this issue. In October, Gallup 
     said 66% of American residents supported legalizing 
     marijuana. More than half of states already allow marijuana 
     for medical and/or adult-use purposes. A vast majority of 
     Americans live in a state where marijuana can be purchased 
     legally. This is not a niche business market; it's a 
     significant part of our economy.
       If Congress respects the rights of the states and the will 
     of the people, as protected in the Tenth Amendment, then we 
     don't need to debate the legalization of marijuana or medical 
     marijuana here today. We need to decide how best to protect 
     those states, given the choices they've democratically 
     enacted. However, I know some opponents will try to cloud the 
     banking issue with attacks on legalization, so I will quickly 
     address some of these concerns.
       Let's talk about what's happened in Colorado, the first 
     state to legalize marijuana for adult use. A federal study by 
     the National Survey on Drug Use and Health showed that teen 
     marijuana use decreased after legalization. The American 
     Public Health Association determined that ``motor vehicle 
     crash fatality rates . . . were not statistically different 
     from those in similar states without recreational marijuana 
     legalization.'' Furthermore, legalization has resulted in a 
     significant decrease in traffic stops, leading to fewer 
     negative interactions between police and drivers, potentially 
     limiting dangerous clashes and tensions with people of color. 
     And because police didn't have to waste their time on these 
     stops and could concentrate on real crime, researchers 
     studying Uniform Crime Reports data (another federal 
     publication) concluded legalization had resulted in greater 
     police clearance rates. So don't listen to Chicken Little. 
     The sky over Colorado did not fall.
       Licensed marijuana businesses are legitimate contributors 
     to our economy. It follows that regulated banking, vendor 
     relations, payroll, and tax payments should be permitted as 
     part of that legitimacy--a condition that will further serve 
     to dismantle the illicit market's influence in this growing 
     industry and help local economies.
       Current conditions, which require all-cash transactions in 
     every aspect of the business encourage tax fraud, add 
     expensive monitoring and bookkeeping expenses, and--most 
     importantly--leave legitimate businesses vulnerable to theft, 
     robbery, and the violence that accompany those crimes. The 
     SAFE Banking Act presents us with an opportunity to greatly 
     assist in stabilizing the industry and enhancing public 
     safety.
       As more legitimate businesses are established, 
     opportunities for cash robberies will increase as more grow-
     facilities and dispensaries come on line. Securing cash 
     onsite, transporting cash to secure locations, and managing 
     cash payroll are necessities for these businesses. And 
     criminal entities are quite adept at conducting high-level 
     reconnaissance of businesses and their security protocols 
     when they know those businesses will have tens of thousands--
     or even hundreds of thousands--of dollars on hand.
       Although extremely important for business owners and the 
     people they employ, my greatest fear is not the loss of 
     profits due to theft. It is the potential for serious 
     assaults and death to the people attempting to protect that 
     cash, or who are merely responsible for it. I fear dispensary 
     employees being at great risk. I fear for the safety of those 
     transporting the cash, and I fear for the well-being of 
     employees on payday. Two weeks of pay for one employee can 
     easily exceed a few thousand dollars. That one employee 
     trying to get home safely from work is an attractive 
     ``score'' for any criminal, and a very easy target for those 
     who know what to look for. Beyond any concern for protecting 
     profit, we have a duty to protect the lives of community 
     members working to earn a living.
       In 2012, Melinda Haag, the U.S. Attorney for Northern 
     California, said, ``Marijuana dispensaries are full of cash, 
     they are at risk of being robbed, and many of them are.'' One 
     example of what can happen: In October 2012, three people 
     kidnapped the owner of a lucrative dispensary in Orange 
     County. According to court documents, the assailants zip-tied 
     the victim, tortured him, and drove him to a patch of desert 
     where they believed he had buried large sums of money. When 
     the kidnappers couldn't find it, they burned him with a 
     blowtorch, cut off his penis, and doused him with bleach 
     before dumping him along the side of a road.
       Four of my policing years were spent investigating crimes 
     within Maryland's Division of Corrections. I've interviewed 
     hundreds of incarcerated civilians convicted of serious 
     crimes, many of whom were proud to boast of their criminal 
     activities and strategies. Their strategic thought process is 
     minimal. The easier the target the better. The bigger the 
     ``score'' the better. Casing the next target is about finding 
     the softest target, and the current conditions in this 
     industry have created many soft targets.
       We, the police, teach target hardening when we conduct 
     security assessments for business owners. Our advice to them 
     is not to

[[Page E1229]]

     have large amounts of cash on hand, to make use of credit and 
     debit card services, avoid routine trips to the bank, and to 
     make use of armored car services. This valuable ``crime 
     prevention 101'' advice is literally useless to marijuana 
     business owners, making them very attractive soft targets.
       I'm not one for fear mongering--what I testify to here 
     today is rooted in experience and research. Any police 
     officer who has worked the street, or investigated enough 
     robberies, will testify to the same regarding any business 
     forced to handle large amounts of cash.
       Members of the committee, it is up to you and other members 
     of Congress to act upon this legislation, establishing access 
     to banking for legitimate marijuana businesses. The safety of 
     thousands of employees, business owners, security personnel, 
     police officers, and community members is in your hands.
       On behalf of myself and the Law Enforcement Action 
     Partnership, I ask that you act swiftly on the SAFE Banking 
     Act because we know it will enhance public safety within our 
     communities. Thank you for your time.
           Sincerely,
                                       Major Neill Franklin, Ret.,
     Executive Director.
                                  ____

                                           Electronic Transactions


                                                  Association,

                                   Washington, DC, March 26, 2019.
     Hon. Maxine Waters,
     Chairwoman, Committee on Financial Services,
     House of Representatives, Washington, DC.
     Hon. Patrick McHenry,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairwoman Waters and Ranking Member McHenry: On 
     behalf of the members of the Electronic Transactions 
     Association (ETA), I am writing in support of H.R. 1595, the 
     bipartisan Secure and Fair Enforcement Banking Act of 2019 
     (SAFE Banking Act), which would allow states that have 
     legalized medical or recreational use of marijuana to bring 
     that commerce into the banking system.
       ETA is the leading trade association for the payments 
     industry, representing over 500 companies that offer 
     electronic transaction processing products and services; its 
     membership spans the breadth of the payments industry to 
     include independent sales organizations, payments networks, 
     financial institutions, transaction processors, mobile 
     payments products and services, payments technologies, 
     equipment suppliers, and online small business lenders.
       Thirty-three states and several U.S. territories have 
     legalized marijuana for medical use and ten states have done 
     so for recreational use. Financial institutions providing 
     services to state-licensed cannabis businesses could find 
     themselves subject to criminal and civil liability under the 
     Controlled Substances Act and federal banking statutes 
     because the use and possession of marijuana is illegal under 
     federal law.
       The conflict between state and federal laws forces 
     businesses to operate on a cash-only basis and has created 
     significant legal and compliance concerns for financial 
     institutions that wish to provide banking services to 
     marijuana related businesses in states where it is currently 
     legal. The SAFE Banking Act would allow legitimate marijuana 
     businesses to access the safety and security of the banking 
     ecosystem in states that have legalized marijuana. Having 
     access to the banking system makes it easier for businesses 
     to track revenues for taxation purposes, decreases a public 
     safety threat as cash intensive businesses are often targets 
     for criminal activity, and allows proper tracking of finances 
     for BSA/AML compliance.
       With the clarifications to Section 4 in the amendment in 
     the nature of a substitute, the SAFE Banking Act would extend 
     the same protections to payment processors as banks and 
     credit unions by prohibiting federal banking regulators from 
     taking adverse actions against financial institutions. This 
     updated language allows the entire scope of these legitimate 
     businesses to access the entire banking ecosystem--including 
     any entity performing a financial service in association with 
     a depository institute.
       ETA takes no position on the legalization or 
     decriminalizing marijuana at the state or federal level for 
     medicinal or recreational uses. However, ETA does support 
     legislation that would resolve the conflict between state and 
     federal laws to allow financial institutions to serve 
     marijuana related businesses in states where these businesses 
     are legal under state law.
       We appreciate your leadership on this important issue. If 
     you have any questions, please feel free to contact me 
     directly.
           Sincerely,
                                                    Scott Talbott,
     Senior Vice President of Government Affairs.
                                  ____

                                               Third Party Payment


                               Processors Association (TPPPA),

                               Washington, DC, September 24, 2019.
     Re H.R. 1595, Secure and Fair Enforcement Banking Act of 
         2019.

     Hon. Maxine Waters,
     Chairwoman, House Financial Services Committee, House of 
         Representatives, Washington, DC.
     Hon. Patrick McHenry,
     Ranking Member, House Financial Services Committee, House of 
         Representatives, Washington, DC.
     Hon. Ed Perlmutter,
     House Financial Services Committee, House of Representatives, 
         Washington, DC.
       The Third Party Payment Processors Association (TPPPA) is 
     writing in support of H.R. 1595, the Secure and Fair 
     Enforcement Banking Act of 2019 (SAFE Banking Act). The TPPPA 
     agrees that action by the federal government is the only 
     durable solution to the challenges posed by conflicting state 
     and federal laws related to cannabis and are eager for a 
     roadmap to compliance related to cannabis-related businesses 
     for banks and payment processors.
       The Third Party Payment Processors Association (TPPPA) is a 
     national not-for-profit industry association whose members 
     include payment processors and banks. The TPPPA has created 
     industry best practices in payment processing through our 
     Compliance Management System (CMS), which relies heavily on 
     the guidance of federal regulators. The CMS serves as 
     guidance to our members in creating documented, risk-based 
     compliance management programs for payment processing.
       The SAFE Banking Act would allow the opportunity for our 
     members to provide banking and payment processing services to 
     cannabis-related businesses in states that have legalized 
     medical or recreational use of cannabis. The SAFE Banking Act 
     would harmonize the conflict between state and federal laws 
     related to financial services, thereby reducing the 
     reluctance of banks and payment processors, like our members, 
     to provide critical financial services to these businesses. 
     The SAFE Banking Act will have the benefit of removing cash, 
     resulting in improved public safety and providing greater 
     financial transparency, reducing the risk of money 
     laundering.
       Payment processors are a key component in reducing cash 
     transactions and keeping money in the financial system. 
     Payment processors include not only companies that facilitate 
     the collection of payments, but also includes payroll 
     processors. Payment processing in the form of either the 
     collection of payments or processing of payroll and/or vendor 
     payments removes the handling of cash. In the absence of 
     payment processing, companies are required to hold large 
     amounts of cash. Customers and employees of merchants without 
     payment processing capability, like cannabis-related 
     industries, are also required to carry and transact with 
     cash. Consider the employee that must hand-deliver cash from 
     their payroll to their bank, if they are even afforded a bank 
     account due to being related to a cannabis business. This 
     creates a great public safety issue not only for businesses, 
     but also for consumers.
       Payment processors are unable to provide payment services 
     without a bank to sponsor these payments into the various 
     payments networks, (e.g. check, ACH, debit/credit cards). 
     Payment processors act as service providers to both the banks 
     and the merchants. (This is not necessarily obvious, and the 
     TPPPA was glad to see specific reference made to payment 
     processors.) Without the safeguards afforded by the SAFE 
     Banking Act, particularly related to FDIC insurance and 
     regulatory enforcement, there are very few banks that are 
     able to reconcile the risks with the opportunities to provide 
     services to this ever-growing sector. Without banks, there 
     are no payment processors.
       We are encouraged by Representative Perlmutter's 
     willingness to consider the addition of related topics. There 
     are two other cannabis-related business matters of importance 
     to the TPPPA members addressed below.
     Operation Choke Point
       The TPPPA believes that cannabis-related businesses are 
     subject to moral bias. While the SAFE Banking Act does 
     prohibit financial regulators from using their regulatory 
     enforcement authority solely based upon the fact that the 
     company or service provider is a cannabis-related business, 
     it does not preclude these same agencies from using their 
     authority based upon reputation risk. As such, we strongly 
     urge the inclusion of language, or merging of H.R. 189--
     Financial Institution Customer Protection Act, which has 
     received overwhelming bipartisan support.
     Hemp/CBD-Related Businesses
       Other guidance that is notably absent, yet still a critical 
     piece to being able to fully address compliance requirements 
     for providing financial services and payment processing to 
     cannabis-related businesses is USDA guidance on hemp. With 
     the passing of the 2018 Farm Bill, the opportunity for 
     providing services to the Hemp/CBD industry is immediately 
     appealing to many of our members. Many banks and payment 
     processors that may be reluctant to banking marijuana at this 
     time, are open and eager to provide financial services to 
     hemp-related businesses but cannot do so with a reasonable 
     level of certainty without the USDA guidance on the 
     regulatory requirements for hemp. Absent this guidance, hemp, 
     in particular CBD, cannot be readily differentiated from 
     marijuana. While the SAFE Banking Act would provide some 
     protection in this regard, it does not provide those banks 
     and payment processors that are open to CBD, but prohibit 
     marijuana, the ability to know that they are not 
     inadvertently engaging in marijuana. The TPPPA urges the 
     escalation of USDA guidance on the requirements of hemp.
       TPPPA members are eager for the clarity afforded by federal 
     regulatory guidance related to banking cannabis. We are 
     encouraged to see that the SAFE Banking Act provides for the 
     timely creation of regulatory

[[Page E1230]]

     guidance by both FinCEN and the FFIEC and look forward to 
     USDA guidance on hemp. This will allow the TPPPA to include 
     this guidance in our best practices. We are grateful for the 
     opportunity to share our support and opinions with The 
     Committee.
           Sincerely,
                                                     Marsha Jones,
     President.
                                  ____



                                   The Real Estate Roundtable,

                                   Washington, DC, March 25, 2019.
     Hon. Maxine Waters,
     Chairwoman, Committee on Financial Services,
     House of Representatives.
     Hon. Jerrold Nadler,
     Chair, Committee on the Judiciary,
     House of Representatives.
     Hon. Patrick McHenry,
     Ranking Member, Committee on Financial Services, House of 
         Representatives.
     Hon. Doug Collins,
     Ranking Member, Committee on the Judiciary,
     House of Representatives.
       Dear Chairwoman Waters, Chairman Nadler, and Ranking 
     Members McHenry and Collins: We represent members involved in 
     almost every aspect of residential and commercial real estate 
     development, design, construction, ownership, management, 
     finance, and brokerage. Our members provide the homes, 
     apartments, health care facilities, offices, industrial 
     sites, shopping centers, and hotels where the American people 
     live, work, play, and heal.
       We support the broadly bipartisan H.R. 1595, the Secure and 
     Fair Enforcement (``SAFE'') Banking Act. The bill has been 
     referred to your committees and is scheduled for markup 
     tomorrow by the Financial Services Committee. The measure 
     will bring state-licensed cannabis-related businesses 
     (``CRBs'') into the federal banking system. If enacted, 
     federally regulated banks would no longer face the threat of 
     sanction simply by providing financial services to a 
     legitimate CRB.
       Furthermore, H.R. 1595 clarifies that banks could not take 
     adverse action on a loan to a real estate owner solely 
     because that owner leases property to a legitimate CRB. The 
     measure also protects sellers and lessors of real estate and 
     other CRB ``service providers'' by clarifying that proceeds 
     from legitimate marijuana-related transactions do not derive 
     from unlawful activity, and thus do not provide a predicate 
     for federal criminal money laundering.
       There is a deepening rift between federal and state laws 
     regarding cannabis policy. According to the National 
     Conference of State Legislatures, all but four (4) states 
     have enacted some form of public marijuana access to this 
     point. At the federal level, however, the Controlled 
     Substances Act classifies marijuana as a ``schedule 1'' drug 
     rendering its use, possession, and sale illegal. This 
     federal-state conflict leaves banks and real estate providers 
     trapped between their mission to serve the needs of lawful 
     businesses in their local communities, and the threat of 
     federal enforcement action. The SAFE Banking Act provides 
     much-needed clarity for the banking, real estate, and 
     business sectors to function within the contours of state 
     laws that have legalized marijuana.
       Without a bank account, dispensaries and other legal CRBs 
     must operate on a cash basis. Risks of crime thus increase 
     and tax revenues to pay for infrastructure and other 
     government services are potentially lost. H.R. 1595 can 
     significantly address these problems by providing protections 
     for banks, real estate firms and their employees from 
     punishment simply because they aim to serve businesses within 
     the 46 states that have legalized marijuana to varying 
     degrees.
       Passage of the SAFE Banking Act is a strong first step to 
     clarify a full range of proper business conduct in the 
     rapidly evolving context of cannabis policy. We recommend 
     that Congress further pass the bipartisan Strengthening the 
     Tenth Amendment through Entrusting States Act (``STATES 
     Act,'' H.R. 6043 last Congress). The STATES Act more 
     holistically addresses financial issues caused by the federal 
     marijuana prohibition. It provides that state-compliant 
     transactions are not ``trafficking'' and do not result in 
     unlawful proceeds. Brokerage, investment, transportation, 
     advertising and other commercial transactions intrinsic and 
     ancillary to real estate services could function more 
     productively with STATES Act safeguards.
       We commend Representatives Perlmutter (D-CO), Heck (D-WA), 
     Stivers (R-OH), and Davidson (R-OH) for originally 
     introducing the SAFE Banking Act, and the dozens of members 
     who have joined as co-sponsors. The Real Estate Roundtable 
     urges H.R. 1595's swift enactment. For more information, 
     please contact Duane J. Desiderio, Senior Vice President and 
     Counsel.
           Sincerely,
                                                Jeffrey D. DeBoer,
     President and Chief Executive Officer.
                                  ____

                                              National Association


                                                  of Realtors,

                               Washington, DC, September 23, 2019.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the more than 1.3 million 
     members of the National Association of REALTORS 
     (NAR) and its affiliate, the Institute of Real Estate 
     Management (IREM), I urge you to pass H.R. 1595, the ``Secure 
     and Fair Enforcement (SAFE) Banking Act of 2019,'' when it is 
     considered on the House floor this week. This bipartisan 
     bill, introduced by Representatives Ed Perlmutter (D-CO).and 
     Steve Stivers (R-OH), provides a clear framework for cannabis 
     businesses to access financial services. As more states 
     legalize cannabis use, the industry continues to rapidly 
     grow, with more than $10 billion in sales and $1 billion in 
     state tax revenue already recorded. However, barriers 
     preventing these state-legal businesses from accessing 
     federally-insured banks can impede their ability to grow 
     while raising safety issues in their communities.
       Thirty-three states have legalized cannabis for medical or 
     recreational use, a number that is expected to rise over the 
     coming years. Despite this, current federal law prevents 
     banks from working with cannabis businesses or ancillary 
     businesses that provide them with goods and services--
     including real estate professionals who have cannabis 
     business owners as their clients. As a result, those states 
     are struggling to address significant challenges to public 
     safety and the regulatory compliance issues that arise with 
     cash-only businesses.
       The SAFE Banking Act takes an important step toward 
     enabling financial services for legitimate cannabis-related 
     businesses by specifying that their proceeds will not be 
     considered unlawful under federal money laundering laws, thus 
     allowing these businesses access to federally-insured banking 
     institutions. Further, it directs the Financial Crimes 
     Enforcement Network (FinCEN) and federal banking regulators 
     to issue guidance and exam procedures for banks working with 
     cannabis businesses. As the legal state-cannabis industry 
     grows, the connections to other types of industries--
     including real estate--will grow as well. The SAFE Banking 
     Act not only gives the industry equal footing with other 
     businesses, enabling it to continue to expand and stimulate 
     the economy, but also provides oversight and improves 
     financial transparency.
       State-legal cannabis businesses require real estate--
     farmland, warehouses, and storefronts--creating multiple 
     contacts to other industries and businesses, each of which is 
     affected by current laws keeping their money out of the bank 
     system. The SAFE Banking Act provides clarity for business 
     owners, banks, and regulators in the cannabis industry while 
     promoting safety and ensuring further growth within the U.S. 
     economy.
       REALTORS thank you for your diligent work to help 
     provide access and clarity to legitimate businesses in those 
     states that have legalized cannabis, which in turn will boost 
     economic growth in real estate and other industries around 
     the country.
           Sincerely,
                                                       John Smaby,
     2019 President.
                                  ____

                                              Safe and Responsible


                                             Banking Alliance,

                                   Washington, DC, March 15, 2019.
     Re Support for the SAFE Banking Act.

     Hon. Maxine Waters,
     Chair, Committee on Financial Services, U.S. Congress, 
         Washington, DC.
     Hon. Ed Perlmutter
     Representative, U.S. Congress,
     Washington, DC.
       Chairwoman Waters, Congressman Perlmutter, and Financial 
     Services Committee Members: I am writing on behalf of the 
     Safe and Responsible Banking Alliance (``SARBA''), a 
     coalition of financial institutions, associations, 
     governments, and business groups advocating for a solution to 
     federal cannabis banking prohibitions. SARBA supports the 
     Secure and Fair Enforcement (SAFE) Banking Act of 2019, which 
     would address many of the key problems associated with the 
     cannabis industry's lack of access to financial institutions. 
     We thank the Committee for holding a hearing on the 
     legislation and urge swift action to bring the bill to the 
     House floor.
       States are rapidly updating and revising existing cannabis 
     policy, and forty-seven states have laws acknowledging the 
     medical benefits of medical cannabis. Of those, thirty-three 
     have enacted legislation that allows for the production and 
     sale of medical cannabis, including nine that allow the sale 
     of cannabis for adult personal use. Dozens of states are 
     considering expanding and implementing new cannabis policies 
     during their current legislative sessions. Unfortunately, 
     federal cannabis laws remain markedly disconnected from the 
     reality of what is happening in the states. Cannabis is still 
     considered an illegal substance under federal law, which 
     means that cannabis-related businesses cannot utilize 
     traditional banking services. The problems that arise from 
     this lack of access are at once substantial and largely 
     avoidable, if we follow the course charted by the SAFE 
     Banking Act.
       When cannabis industry businesses are denied access to 
     financial institutions, they are forced to operate and 
     purchase using cash alone. This poses obvious public safety 
     dangers, including the potential for an increase in violent 
     crimes. Communities will be safer if cannabis-related funds 
     can be electronically-transferred and deposited in regulated 
     financial institutions--yet our current laws make this nearly 
     impossible. The SAFE Banking Act would change this by 
     creating protections for financial institutions that work 
     with the cannabis industry. The sooner we move forward with 
     the SAFE Banking Act, the safer it will be for those working 
     in and around the regulated cannabis industry.
       The SAFE Banking Act will improve conditions not only for 
     the public, but for financial institutions as well. Even in 
     jurisdictions where cannabis is legal, financial institutions 
     face the potential for risk because

[[Page E1231]]

     funds involved in cannabis transactions could be considered 
     illegally-gained by federal regulators and law enforcement. 
     This discourages banks from working with the industry, 
     providing loans to cannabis and ancillary businesses, and 
     maintaining personal accounts for individuals who work for 
     these businesses. Further, under current policy, banks are 
     forced to make determinations about how to deal with existing 
     and new costumers who are ancillary to the cannabis industry, 
     such as plumbers, electricians, and horticulturists.
       While approximately 500 institutions are known to be 
     working with the cannabis industry, most financial 
     institutions are hesitant to become involved in the industry 
     due to a lack of clarity surrounding cannabis laws. Federal 
     law paints any dollar that flows through the cannabis 
     industry as tainted, but such broad brush strokes provide 
     little certainty to financial institutions. Financial 
     institutions may feel compelled to cancel the account of 
     someone who works in the cannabis industry. All depository 
     institutions have to consider how to handle an individual's 
     cash deposits that may have at some time been involved in a 
     legitimate cannabis related transaction. Such dilemmas reveal 
     the broad reach of the cannabis industry. Under current 
     federal law, banks interacting with these customers are at 
     risk. Financial institutions cannot help but be exposed to 
     potential consequences, because the cannabis industry is 
     intertwined with so many other legitimate businesses that 
     support the burgeoning marijuana industry.
       The SAFE Banking Act is a critical first step to addressing 
     the potential risk created by the inescapable comingling of 
     cannabis-related funds with ancillary business and individual 
     accounts. By clarifying federal cannabis regulations, 
     including money laundering issues and Suspicious Activity 
     Reports (SARs), the SAFE Banking Act would make it much safer 
     for financial institutions to process cannabis-related 
     transactions.
       In addition, the SAFE Banking Act could increase access to 
     capital among demographics that have been disproportionately 
     disadvantaged by the federal prohibition of cannabis. This 
     bill would allow financial institutions to provide small 
     business loans for cannabis-related businesses, allowing 
     those with the least access to capital--often minorities--to 
     participate in the new legal cannabis industry. Congress has 
     an opportunity and responsibility to help this process move 
     forward.
       Addressing the existing banking options could also improve 
     patient access in the 33 states with medical marijuana 
     programs. Currently patients and caregivers who rely on 
     medical marijuana are forced to pay out of pocket because no 
     state or private insurance company will cover the treatment. 
     Compounding this significant financial strain is the fact 
     that these are almost exclusively cash transactions, because 
     credit or debit cards--including HSA/FSA cards and accounts--
     cannot be used in cannabis-related transactions. Families are 
     thus forced to choose between coming up with large sums of 
     cash each month and forgoing other basic needs, or going 
     without necessary medication. Many state legitimate medical 
     cannabis businesses that are working with banks are forced to 
     pay large monthly fees. For those not working with banks or 
     credit unions there are significant costs related to 
     necessary security measures. If medical cannabis businesses 
     are better able to work with financial institutions, this 
     could significantly reduce the cost of medication. By opening 
     up financial services to the cannabis industry, the SAFE 
     Banking Act could increase patient access to medical cannabis 
     which is disproportionately high due in part due to a lack of 
     banking access.
       With two out of every three Americans living somewhere that 
     allows the legal purchase of marijuana, it is long past time 
     that the federal government enact policies to resolve the 
     conflict between existing policy and state laws. Cannabis 
     banking reform is an important issue facing members of the 
     116th Congress, and the SAFE Banking Act would be a 
     significant step in the right direction.
       SARBA is pleased to support the SAFE Banking Act, and would 
     urge the House Financial Services Committee to move swiftly 
     to consider this important legislation.
           Sincerely,
                                                     Becky Dansky,
                                               Executive Director.