[Congressional Record Volume 165, Number 158 (Tuesday, October 1, 2019)]
[Extensions of Remarks]
[Pages E1239-E1241]
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.

                                               September 24, 2019.
       Dear Congressman Perlmutter: We, the undersigned U.S. trade 
     associations, write to express support for the passage of 
     H.R. 1595, the SAFE Banking Act of 2019, as amended, on the 
     House Floor. Collectively, we represent a majority of the 
     companies, agents, and brokers offering property-casualty, 
     title, and reinsurance (collectively, ``insurers'') in the 
     U.S. We appreciate your leadership in seeking needed clarity 
     for insurance transactions related to cannabis that are 
     otherwise permissible under state law.
       The insurance industry is potentially exposed to liability 
     arising from the differences of the legal treatment of 
     cannabis and cannabis products under federal and state law 
     and regulation at the state level. However, with the addition 
     of key language from H.R. 4074, Clarifying Law Around 
     Insurance Marijuana Act, sponsored by Representative Nydia 
     Velazquez and Representative Steve Stivers, H.R. 1595's safe 
     harbor provisions would prevent federal criminal prosecution 
     of and civil liability for agents, brokers, and insurers, 
     their officers, directors or employees when engaging in the 
     business of insurance in states that have legalized cannabis 
     in some form.
       By resolving the legal uncertainty presented by the dueling 
     state and federal treatment of cannabis, the insurance 
     industry can serve both cannabis-related legitimate 
     businesses (CRLBs) and other commercial and personal lines 
     consumers who may have a direct or indirect relationship to 
     state-legalized cannabis, and still be in compliance with the 
     law. Insurers must also continue to satisfy all applicable 
     state statutory or regulatory requirements, such as those 
     pertaining to consumer protections and claims payments.
       While the industry still needs additional clarifications to 
     fully resolve the challenges presented by conflicting state 
     and federal cannabis laws, H.R. 1595 is a significant and 
     important step toward legal certainty for our industry.
       Again, we greatly appreciate your leadership, and we look 
     forward to continuing to work with you and Congress to ensure 
     our industry is not caught between additional conflicting 
     obligations under federal and state law.
           Sincerely,
         American Land Title Association (ALTA), American Property 
           Casualty Insurance Association (APCIA), Independent 
           Insurance Agents & Brokers of America (IIABA), National 
           Association of Mutual Insurance Companies (NAMIC), 
           National Association of Professional Insurance Agents 
           (PIA), Reinsurance Association of America (RAA), 
           Wholesale & Specialty Insurance Association (WSIA).
                                  ____

                                          The Council of Insurance


                                             Agents & Brokers,

                                               September 23, 2019.
     Re Support for the SAFE Banking Act.

     Hon. Ed Perlmutter,
     House of Representatives,
     Washington, DC.
       Dear Congressman Perlmutter: On behalf of The Council of 
     Insurance Agents and Brokers (``The Council''), I write to 
     express our strong support for the SAFE Banking Act. This 
     bipartisan legislation, we believe, addresses long-standing 
     obstacles to insurer and broker participation in the cannabis 
     market. We urge Congress to pass this important legislation 
     as soon as possible.
       By way of background, The Council represents the largest 
     and most successful employee benefits and property/casualty 
     agencies and brokerage firms. Council member firms annually 
     place more than $300 billion in commercial insurance business 
     in the United States and abroad. Council members conduct 
     business in some 30,000 locations and employ upwards of 
     350,000 people worldwide. In addition, Council members 
     specialize in a wide range of insurance products and risk 
     management services for business, industry, government, and 
     the public.
       The need for legal cannabis insurance (spanning many lines 
     of insurance and the entire cannabis supply chain) is only 
     growing and many insurance businesses, including brokers, are 
     anxious to enter the market. The primary obstacle to their 
     entry has been and continues to be the threat of felonious 
     liability under federal law. The Council therefore 
     appreciates your efforts to address federal-law barriers.
       The SAFE Banking Act will protect persons engaged in the 
     business of insurance who offer insurance products and 
     services to state-legalized cannabis businesses from 
     liability under federal law. The bill, as amended to include 
     insurance businesses, recognizes that insurance is as 
     essential as banking--if not more so--to security, safety and 
     transparency in the cannabis industry. Lack of insurance for 
     the industry adds layers of unnecessary risk and exposure for 
     businesses, their employees, and their customers.
       Again, we very much appreciate your leadership on the SAFE 
     Banking Act. We strongly support the bill and look forward to 
     its passage as soon as possible.
           Respectfully submitted,
                                                    Ken A. Crerar,
     President/CEO.
                                  ____

                                      Rural County Representatives


                                                 of California

                                Sacramento, CA, February 14, 2019.
     Re Secure and Fair Enforcement Banking Act of 2019--SUPPORT.

     Hon. Ed Perlmutter,
     Member, House of Representatives,
     Washington, DC.
       Dear Representative Perlmutter: On behalf of the Rural 
     County Representatives of California (RCRC), I write to 
     express our support for your ``Secure and Fair Enforcement 
     Banking Act of 2019,'' (Safe Banking Act) which would 
     liberalize our federal banking laws to allow cannabis-related 
     businesses access to financial services. RCRC is an 
     association of California's rural counties, and the RCRC 
     Board of Directors is comprised of elected supervisors from 
     our thirty-six member counties.
       California has enacted laws allowing for both medical-use 
     and adult-use of cannabis. In light of the actions of 
     California and other states, it has become apparent there is 
     a need to align federal and state laws when it comes to 
     accessing the banking system. Unfortunately, there is a 
     significant barrier to financial institutions who provide 
     banking services to state- and locally-licensed cannabis 
     businesses as they are subject to criminal prosecution for 
     ``aiding and abetting'' a federal crime as well as money 
     laundering.
       Because current law restricts cannabis businesses from 
     accessing banking services, businesses must operate in an 
     ``all cash'' scheme, which poses a serious public safety 
     risk. In addition to the Controlled Substances Act, there are 
     a variety of federal banking laws (i.e. the Bank Secrecy Act) 
     which impact the ability of banks to accept monies derived 
     from activities involving cannabis. In February 2014, the 
     Obama Administration issued guidance to financial 
     institutions and the cannabis industry on how the Department 
     of Justice would enforce banking laws related to cannabis. 
     Despite

[[Page E1240]]

     these guidance memos, most financial institutions refuse to 
     bank cannabis activities and suggest that Congress enact 
     statutes to liberalize the banking laws.
       Access to banking remains one of the most significant 
     hurdles facing the cannabis industry and state and local 
     regulatory authorities. In essence, all cannabis-related 
     financial activities are conducted in cash which translates 
     into counties receiving property tax payments in cash, as 
     well as any local regulatory fees and taxes. The current all-
     cash business also makes it extremely difficult to audit 
     cannabis operators, as well as ensure compliance with various 
     rules and regulations. Most importantly, the all-cash status 
     presents enormous security challenges to all parties involved 
     in the cannabis industry.
       For these reasons, we are pleased to support your SAFE 
     Banking Act. If you should have any questions, please contact 
     me.
           Sincerely,
                                                    Paul A. Smith,
     Vice President, Governmental Affairs.
                                  ____



                                        Brink's, Incorporated,

                                       Dallas, TX, March 25, 2019.
     Hon. Maxine Waters,
     Chair, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Patrick McHenry,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chair Waters and Ranking Member McHenry: On behalf of 
     Brink's Incorporated, I wanted to share our strong support 
     for H.R. 1595, the ``Secure and Fair Enforcement Banking Act 
     of 2019.'' We believe this legislation addresses much of the 
     uncertainty in the financial services sector about banking 
     and handling of funds sourced from state-regulated cannabis 
     businesses in those states that have legalized cannabis, and 
     helps move toward safer and more secure transport of the cash 
     from those businesses and ultimately the banking of those 
     funds. We wish to thank Representatives Perlmutter, Heck, 
     Stivers and Davidson for their leadership on this issue.
       As you may be aware, Brink's is the world's largest cash 
     management company and the global leader in total cash 
     management, secure route-based logistics and payment 
     solutions including cash-in-transit, ATM services, cash 
     management services (including vault outsourcing, money 
     processing and intelligent safe services), and international 
     transportation of valuables. The company has a legacy of 160 
     years in the business of safely and securely transporting 
     valuables and cash--getting them where they need to be m the 
     safest and most secure manner possible. We are also a vital 
     partner to our customers like banks, helping with the 
     logistics of transporting and processing cash.
       Brink's does not take a position in favor or opposed to 
     legalization of cannabis or marijuana. Like our bank 
     customers, Brink's must also ensure that it follows federal 
     laws such as requirements on anti-money laundering, and work 
     with our customers subject to federal bank charters and laws 
     and related statutes. These current ambiguity of these 
     federal laws creates a significant barrier to safe handling 
     of the cash generated by state-sanctioned cannabis 
     businesses, because many banks believe they cannot accept 
     funds from cannabis-related businesses in states that have 
     legalized cannabis in some form, and because there are 
     barriers to safely processing and delivering these funds. The 
     public safety issue in states with legalized cannabis 
     businesses is immediately apparent when thousands and even 
     millions of dollars in cash are being stored and transported 
     without adequate safeguards.
       Brink's knows well that storage and transport of cash is a 
     very serious issue, and safety and security are both 
     paramount concerns. If H.R. 1595 were enacted, we believe the 
     law would allow companies like Brink's to safely and securely 
     transport cash to the bank customers in states that have 
     legalized and regulated cannabis. It would ensure that the 
     funds are deposited, traced and any suspicious activity 
     reported to authorities.
       Thank you for considering these comments, and for taking 
     steps to address a safety and security issue in those states 
     that have chosen to legalize and regulate cannabis for 
     medical or recreational purposes. We look forward to working 
     with the Committee on these issues and appreciate your 
     consideration of Brink's view on this issue.
           Sincerely,

                                             Michael F. Beech,

                                         Executive Vice President,
     Brink's, Incorporated.
                                  ____

                                          International Council of


                                             Shopping Centers,

                                                     New York, NY.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
     Hon. Mitch McConnell,
     Majority Leader, U.S. Senate,
     Washington, DC.
     Hon. Chuck Schumer,
     Minority Leader, U.S. Senate,
     Washington, DC.
     Hon. Mike Crapo,
     Chairman, Senate Banking Committee,
     Washington, DC.
     Hon. Sherrod Brown,
     Ranking Member, Senate Banking Committee,
     Washington, DC.
       Dear Speaker Pelosi, Leaders McCarthy, McConnell, and 
     Schumer, Chairman Crapo and Ranking Member Brown: On behalf 
     of the International Council of Shopping Centers (ICSC), I 
     express strong support for H.R. 1595, the Secure and Fair 
     Enforcement (SAFE) Banking Act, which would allow cannabis-
     related businesses (including retail tenants and their 
     landlords) in states with existing regulatory structures to 
     access the financial services system. The SAFE Banking Act's 
     protections for ancillary businesses are critical for retail 
     landlords considering leasing space to tenants operating in 
     compliance with federal and state laws governing the emerging 
     legalized cannabis and cannabidiol (CBD) market.
       ICSC serves the global retail real estate industry. We 
     provide our 70,000+ member network in over 100 countries with 
     invaluable resources, connections and industry insights, and 
     actively work together to shape public policy. ICSC does not 
     have an official position on the legalization, 
     decriminalization, or prosecution related to the use of 
     cannabis products or illicit drugs. Our support of H.R. 1595 
     reflects growth in the marketplace associated with numerous 
     states' efforts to legalize cannabis, both recreationally and 
     medically, and the avoidable challenges associated with the 
     unresolved liability to financial institutions and other 
     ancillary businesses related to the broad authority of the 
     Controlled Substances Act.
       A total of 34 states, District of Columbia, Guam, Puerto 
     Rico and U.S. Virgin Islands have sanctioned comprehensive, 
     publicly available medical marijuana/cannabis programs. 
     Approved efforts in 12 states allow use of ``low THC, high 
     cannabidiol (CBD)'' products for medical reasons in limited 
     situations or as a legal defense. Meanwhile, hundreds of 
     licensed and regulated businesses do not have access to the 
     banking or insurance services and are unable to accept credit 
     cards, deposit revenues, or make use of bank checks to pay 
     rent, payroll, or taxes.
       H.R. 1595 would prevent federal banking regulators from 
     punishing banks for working with cannabis-related businesses 
     that are obeying state laws, taking legal action on loans 
     made to those businesses and related businesses, or limiting 
     a depository institution's access to the Deposit Insurance 
     Fund. The bill would also require the Financial Institution 
     Examination Council to develop guidance to help credit unions 
     and banks understand how to lawfully serve cannabis 
     businesses. If enacted, banks would no longer face the threat 
     of federal sanction for working with cannabis-related 
     businesses, including tenants of retail real estate spaces.
       Importantly, H.R. 1595 would also protect ancillary 
     businesses, such as commercial landlords and brokers that 
     lease space to cannabis retailers, from being charged with 
     money laundering and other financial crimes. Protections 
     under Section 3 of the bill specifically extend to landlords 
     who may rent or lease to cannabis-related businesses 
     operating within state law. While challenges will remain, 
     this legislation will address the growing legal and financial 
     liabilities for those who accept these businesses as tenants 
     in retail real estate properties.
       We look forward to working with you and your colleagues on 
     this narrowly-tailored bill that balances public safety with 
     the needs of the emerging legalized cannabis product market. 
     We look forward to working with you on this very important 
     matter.
           Sincerely,

                                                  Betsy Laird,

                                            Senior Vice President,
     Global Public Policy.
                                  ____

                                                 Minority Cannabis


                                         Business Association,

                                                  August 20, 2019.
     Re Minority Business Leaders Call for Support of the SAFE 
         Banking Act of 2019.
     Majority Leader Steny Hoyer,
     Washington, DC.
       Dear Majority Leader Hoyer: I am writing on behalf of the 
     Minority Cannabis Business Association (MCBA) in support of 
     the SAFE Banking Act of 2019 which provides a critical first 
     step towards developing an equitable federal cannabis 
     framework. MCBA represents more than 200 minority-owned 
     businesses, entrepreneurs and community leaders from across 
     the United States seeking to create an equitable and 
     responsible cannabis industry. We are the only national trade 
     association dedicated to serving the needs of the minority 
     cannabis businesses and communities disproportionately 
     affected by the lack of access to banking products and 
     services.
       Minority-owned businesses make up less than one-fifth of 
     all cannabis businesses. The lack of access to capital is 
     cited as the primary reason for this disparity. Despite 
     benefiting from the aura of diversity surrounding cannabis 
     and the political will of people of color, the industry is 
     overwhelmingly white.
       The generations long War on Drugs and systemic economic 
     suppression have made it difficult for minority entrepreneurs 
     to accumulate and access the inter-generational wealth that 
     provides a significant portion of the financing necessary to 
     enter legal cannabis markets. The prohibitive cost of 
     starting a cannabis business, combined with the lack of 
     access to traditional small business financial services, 
     forces entrepreneurs to partner with investors who tend to 
     favor high yield investments and majority-ownership.
       Some states and municipalities have created equity programs 
     aimed to facilitate industry participation by those most 
     impacted

[[Page E1241]]

     by the failed War on Drugs. Unfortunately, these programs are 
     undermined, if not rendered moot, by the lack of access to 
     capital. Traditional funding sources are unavailable to cover 
     the extraordinary start-up costs including license 
     application fees commonly exceeding tens of thousands of 
     dollars and some states require millions in cash escrow or 
     bond. This leaves state equity licensees vulnerable to 
     predatory lending and business practices. Equity applicants 
     and owners give up the rights and benefits of ownership for 
     access to much needed funds and a chance at success. The SAFE 
     Banking Act addresses how current banking laws codify the 
     disproportionately high cost of financing paid by minorities 
     and create inequitable barriers to entry and success.
       Furthermore, the large cash transactions, necessary without 
     access to banks, create dangerous burdens for consumers, 
     patients, employees, business owners and their communities. 
     Patients and consumers must carry cash for purchases. 
     Employees and business-owners both bear the risk of 
     transacting in, storing, and transporting staggering sums of 
     cash. Communities then share the risk created by this cash 
     economy. These risks are amplified in communities with higher 
     crime rates, limited resources, and inconsistent law 
     enforcement. Commonly, these communities have higher 
     concentrations of dispensaries. The number of dispensaries 
     places an undue burden on vulnerable communities and business 
     owners seeking to provide revenue, income, and investment in 
     communities where it is most needed.
       MCBA asks you to join us in support of the SAFE Banking Act 
     which addresses the unique business challenges of the 
     cannabis industry that disproportionately impact minority 
     business-owners and our communities. In addition to providing 
     access to capital, the SAFE Banking Act includes additional 
     equity study and data requirements. Federal regulators would 
     be required to provide annual reports to Congress on the 
     availability of access to financial services for minority-
     owned cannabis businesses and Government Accountability 
     Office (GAO) would be required to carry out a study on the 
     barriers to marketplace entry for minority-owned cannabis 
     businesses. These provisions would provide information to 
     help build an equitable legal cannabis framework.
       MCBA urges swift action for the minority entrepreneurs who 
     cannot wait for banking, as market-share is divided among the 
     thirty-percent of well-capitalized big cannabis businesses 
     with access to non-traditional financing. As we work toward 
     legalization and our greater equity goals, we must ensure 
     that generational financial inequities do not continue to 
     shape and color the face of the cannabis industry.
       We welcome the opportunity to engage with your office on 
     these issues. Please feel free to contact us for more 
     information or if we may be of any assistance on these 
     matters.
           Sincerely,

                                                Shanita Penny,

                                                        President,
                           Minority Cannabis Business Association.