[Congressional Record Volume 165, Number 159 (Friday, October 4, 2019)]
[Extensions of Remarks]
[Pages E1253-E1254]
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 submit the following letters of 
endorsement for H.R. 1595, the SAFE Banking Act.

                                The ScottsMiracle-Gro Company,

                                                February 12, 2019.
     Re Challenges and Solutions: Access to Banking Services for 
         Cannabis-Related Businesses Hearing.

     Hon. Gregory W. Meeks,
     Chair, Subcommittee on Consumer Protections & Financial 
         Institutions, House Committee on Financial Services, 
         Washington, DC.
       Dear Chairman Meeks: I am writing regarding the upcoming 
     hearing of the Subcommittee on Consumer Protection and 
     Financial Institutions titled ``Challenges and Solutions: 
     Access to Banking Services for Cannabis-Related Businesses.''
       The ScottsMiracle-Gro Company is the quintessential 
     American business. Established in 1868 in Marysville, Ohio, 
     the ScottsMiracle-Gro name is synonymous with America's love 
     for lawns and gardens. We are also a leader in the evolution 
     and emergence of indoor and greenhouse gardening through our 
     subsidiary, The Hawthorne Gardening Company.
       With approximately 6,000 associates at more than 65 U.S. 
     locations in 26 states, ScottsMiracle-Gro has small and large 
     manufacturing plants that create products for American 
     consumers. The vast majority of our business is based on a 
     wide range of products for lawn and garden care. However, we 
     are also the country's largest manufacturer of hydroponic 
     growing systems, nutrients, lights, filters and components 
     for indoor growing. These products can be used to nurture a 
     wide variety of plants, including cannabis. Our hydroponic 
     division is expected to generate revenue this year of 
     approximately $600 million, or about 20 percent of company-
     wide revenue.
       While ScottsMiracle-Gro does not directly participate in 
     the U.S. cannabis industry, this rapidly growing and critical 
     business unit is nonetheless impacted by the existing 
     conflict between federal and state laws. Our concern is 
     particularly acute when it comes to our relationships with 
     our banking partners. We know that state-law-authorized 
     cannabis cultivators are among those who use our products to 
     grow their crop. However, we are unable to sell equipment to 
     them directly because of the current banking rules. In order 
     to satisfy our banks' compliance requirements and maintain 
     our banking relationships, we are required to use a costly 
     two-step distribution process to serve these end customers.
       We share these experiences to help the committee understand 
     the vast implications and challenges to the current system. 
     While the committee may hear from many cannabis companies, we 
     also want to highlight the inefficiencies ScottsMiracle-Gro 
     faces as a provider to this industry.
       We applaud the Committee for taking the time to learn more 
     about the challenges of this current arrangement and 
     encourage you to examine the many different aspects of this 
     banking issue during your evaluation of the topic, including 
     the needs of ancillary companies like ScottsMiracle-Gro. We 
     also thank Congressmen Perlmutter, Heck, Stivers, and 
     Davidson for their leadership on this important issue through 
     their work on the SAFE Banking Act arid look forward to 
     additional discussion on this measure as a means to address 
     concerns raised in this letter.
       As an American company with over 150 years of business 
     experience, we have many unique insights about this emerging 
     industry and would be happy to share those perspectives as 
     the Committee continues to learn more and develops solutions 
     to address this issue.
       Thank you for your attention to this matter.
                                                         Jim King.
                                  ____
                                  
                                               September 23, 2019.
     Hon. Ed Perlmutter,
     Washington, DC.
       Dear Rep. Perlmutter: In June of last year, at the 86th 
     annual meeting of the U.S. Conference of Mayors in Boston, we 
     formed a first-of-its-kind local government coalition of 
     mayors to establish a national framework to prepare 
     governments for the implementation of legalized marijuana. 
     Our coalition is writing to you today to encourage 
     congressional support for passage of the SAFE Banking Act. As 
     mayors of many American cities leading the implementation of 
     safe and successfully regulated cannabis markets, we believe 
     it is long overdue for marijuana businesses to have the same 
     access to banking and financial services as all other 
     legitimate U.S. businesses. Passage of this Act would add 
     important protections against an illegal market and bad 
     actors, as well as allow for

[[Page E1254]]

     full transparency and regulation of transactions and provide 
     an economic boost for the United States.
       More than $100 million dollars in marijuana tax revenue is 
     projected in our cities from marijuana sales in 2019. Opening 
     financial services to the cannabis industry could reduce the 
     opportunity and motive for crime in what is currently a cash-
     based industry. It would also improve the ability of the 
     federal government to audit tax receipts and allow for the 
     legalized markets to reduce unnecessary financial expenses 
     for the cannabis industry, potentially leading to additional 
     pay for the many employees working in this industry. 
     Additionally, billions of dollars in deposits nationwide 
     would strengthen the country's financial sector.
       The vast majority of cannabis businesses comply with the 
     rules and regulations, and the industry has made meaningful 
     contributions to supporting strong and safe markets across 
     the United States. Marijuana businesses have consistently 
     supported youth prevention efforts and have also played an 
     important role in educating the public on the rules for 
     marijuana consumption. They are a valid contributor to our 
     local economies, and they have overcome many obstacles to 
     earn their place among our country's legitimate businesses.
       Voters across the United States have chosen to end 
     marijuana prohibition. It's long overdue that Congress 
     respects the will of our voters in legalized cannabis markets 
     and allow banking services for this legitimate industry.
       Legalized marijuana has generated billions of dollars in 
     economic activity nationwide. Allowing banking services is a 
     national economic stimulus that does not cost taxpayers and 
     would be a bipartisan victory for champions of states' rights 
     and the Tenth Amendment.
           Respectfully,
         Mayors Coalition to Push for Marijuana Reform--Michael B. 
           Hancock, Mayor of Denver, CO; Eric Garcetti, Mayor of 
           Los Angeles, CA; Libby Schaaf, Mayor of Oakland, CA; 
           Heidi Williams, Mayor of Thornton, CO; Ted Wheeler, 
           Mayor of Portland, OR.
                                  ____
                                  
                                                American Financial


                                         Services Association,

                               Washington, DC, September 25, 2019.
     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi and Minority Leader McCarthy: The 
     American Financial Services Association (AFSA) writes to 
     express its strong support for H.R. 1595, the Secure and Fair 
     Enforcement (SAFE) Banking Act, which is scheduled for 
     consideration before the House of Representatives on 
     September 25.
       H.R. 1595, sponsored by Representatives Ed Perlmutter (D-
     CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren 
     Davidson (R-OH), along with more than 200 bipartisan House 
     members, includes an important provision ending Operation 
     Choke Point. Specifically, it prohibits a federal banking 
     agency from ordering a bank to terminate a banking 
     relationship with a legal business unless there is a valid 
     reason and that reason is not based solely on reputational 
     risk.
       The ostensible intent of Choke Point program was to prevent 
     criminal fraud. However, in actuality, federal officials 
     pressured banks to close accounts of businesses operating 
     within state and federal law without legal recourse or due 
     process solely because the officials were ideologically 
     opposed to the businesses' existence. Under Operation Choke 
     Point, businesses that were operating legally suddenly found 
     banks terminating their accounts, in some cases accounts that 
     the business had had for years, without explanation. While 
     the program was targeted at gun dealers and payday lenders, 
     other businesses, such as installment lenders, were also 
     impacted. No legal business should be targeted solely based 
     on the political bias of a particular administration.
       Even though Operation Choke Point has officially ended, its 
     effects remain. Financial services companies that follow 
     state and federal laws are still having their accounts closed 
     with very little explanation. Furthermore, companies that had 
     their accounts closed may still be having trouble finding new 
     banking relationships. Legitimate bank customers, like 
     traditional installment lenders, which have provided safe and 
     affordable small-dollar credit to consumers in their 
     communities for over a century, deserve fair access and fair 
     treatment by federal banking agencies.
       We are pleased that Congress is acting in the interest of 
     small businesses, who in turn, serve a large number of 
     American consumers. Limiting the availability of lawful goods 
     and services to consumers in an attempt to punish politically 
     disfavored businesses harms consumers and sets a bad 
     precedent. Government initiatives must be carried out on 
     solid legal ground to be credible.
       They should not be based on political bias and not 
     undermine faith in government agencies and the rule of law.
       We urge members of the House of Representatives to support 
     H.R. 1595.
           Sincerely,

                                                 Bill Himpler,

                                                  President & CEO,
     American Financial Services Association.
                                  ____

                                               September 20, 2019.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi and Minority Leader McCarthy: As a 
     national, diverse, multi-sector collection of broad 
     stakeholders, that are impacted by the burgeoning legal 
     cannabis industry throughout the United States, we write to 
     ask that you bring the SAFE Banking Act (H.R. 1595) before 
     the House floor for a vote. Our organizations support taking 
     an initial step that allows proceeds from the legal cannabis 
     industry into the banking system for purposes of public 
     safety and to protect law-abiding financial institutions and 
     ancillary businesses that have been put in an untenable 
     position.
       With 33 states and several territories permitting cannabis 
     use, a growing chorus of Americans and legal businesses now 
     face an increasing number of risks resulting from a patchwork 
     legal system with no federal banking protections. Because of 
     this, U.S. industry and, especially, financial institutions--
     which provide the infrastructure for safe marketplaces to 
     grow--must assume civil and in some instances, criminal 
     liability in order to service state-licensed cannabis 
     businesses and ancillary companies.
       As a result, the distribution, sale, possession, research, 
     transaction, housing, employment, and broader landscape of 
     cannabis is becoming increasingly problematic. This only 
     creates more legal and security concerns that impact the 
     operations and safety of businesses and consumers. More 
     notably, the lack of available safe harbor for cannabis will 
     continue to challenge the full adoption and deployment of the 
     legal hemp and CBD products market in the U.S. due to the 
     inextricable link between hemp and cannabis.
       To help resolve this, we urge Congress to vote on and pass 
     the SAFE Banking Act or similar measures, which are meant to 
     create a safe harbor for depository institutions that provide 
     a financial product or service to a covered business in a 
     state which has implemented laws and regulations permitting 
     the use of cannabis. A safe harbor would not only enable law 
     enforcement and states to effectively monitor and regulate 
     cannabis transactions and businesses, but it would bring 
     billions of dollars and tax revenue out of duffel bags and 
     safes and into the regulated banking sector.
       We understand that creating a true federal regulatory 
     framework for cannabis is a multi-step process. However, we 
     strongly believe that the SAFE Banking Act is a critical 
     first step to ensure that legal cannabis marketplaces are 
     safe, legal, and transparent.
       Thank you for your thoughtful, bipartisan leadership. We 
     look forward to working with you on this increasingly 
     important issue.
           Sincerely,
       American Bankers Association.
       Americans for Prosperity.
       Council of Insurance Agents and Brokers.
       Electronic Transactions Association.
       National Association of Mutual Insurance Companies.
       National Association of Professional Employer Associations.
       National Association of REALTORS.
       Wholesale & Specialty Insurance Association.

                          ____________________