[Congressional Record Volume 167, Number 69 (Wednesday, April 21, 2021)]
[Extensions of Remarks]
[Pages E433-E436]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            SECURE AND FAIR ENFORCEMENT BANKING ACT OF 2021

                                 ______
                                 

                               speech of

                           HON. ED PERLMUTTER

                              of colorado

                    in the house of representatives

                         Monday, April 19, 2021

  Mr. PERLMUTTER. Mr. Speaker, I submit the following letters of 
endorsement for H.R. 1996, the SAFE Banking Act of 2021.

                                        American Trade Association


                                        for Cannabis and Hemp,

                                                   April 19, 2021.
     Re Support For SAFE Banking Act Legislation.

     Hon. Charles Schumer,
     Senate Majority Leader,
     U.S. Senate, Washington, DC.
     Hon. Nancy Pelosi,
     Speaker of the House,
     House of Representatives, Washington, DC.
     Hon. Mitch McConnell,
     Senate Minority Leader,
     U.S. Senate, Washington, DC.
     Hon. Kevin McCarthy,
     House Minority Leader,
     House of Representatives, Washington, DC.
       Dear Majority Leader Schumer, Senate Minority Leader 
     McConnell, Speaker Pelosi, and House Minority Leader 
     McCarthy: We write to you today in support of the SAFE 
     Banking Act, legislation that will permit banks to provide 
     services to state regulated marijuana businesses, employees, 
     and ancillary businesses.
       Unfortunately, under current federal law and regulations, 
     state licensed and compliant cannabis businesses are unable 
     to access banking services and are forced to operate 
     primarily in cash. This creates an unnecessary risk to public 
     safety for store operators, employees, and customers.
       As we continue to see more states and territories move 
     forward with the regulation of some form of adult-use 
     marijuana, medical marijuana, or hemp derived CBD, it is 
     essential to address the crisis the industry faces to access 
     banking.
       The threats faced by financial institutions of potential 
     criminal prosecution for working with marijuana businesses as 
     a result of the Controlled Substances Act are unacceptable 
     and outdated.
       We strongly support the passage of the SAFE Banking Act and 
     it is our hope that Congress will act swiftly.
           Sincerely,
       American Trade Association for Cannabis and Hemp, Missouri 
     Medical Cannabis, Georgia Cannabis Trade Association, 
     Washington Cannabusiness Association, Alaska Marijuana 
     Industry Association, MTCIA.
       New Jersey Cannabis Trade Association, PCC, MICIA, Colorado 
     Leads, HICIA, Southern California Coalition.
       Maryland Wholesale Medical Cannabis Trade Association, 
     Commonwealth Dispensary Association, DC Cannabis Trade 
     Association, Cannabiz, Nevada Dispensary Association.

[[Page E434]]

                                 American Bankers Association,

                                   Washington, DC, April 19, 2021.
     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: On behalf 
     of the American Bankers Association (ABA), I am writing to 
     express our strong support for H.R. 1996, the Secure and Fair 
     Enforcement Banking Act (SAFE Banking Act) of 2021 introduced 
     by Representatives Ed Perlmutter (D-CO), Steve Stivers (R-
     OH), Warren Davidson (R-OH), Nydia Velazquez (D-NY) and over 
     150 bipartisan cosponsors.
       This legislation, scheduled for consideration on this 
     week's suspension calendar, addresses the conflict between 
     federal and state law and whether banks can serve cannabis 
     and cannabis related businesses. This issue has become a 
     challenge for so many of our nation's communities and the 
     banks that serve them. We were pleased to see this 
     legislation passed the House of Representatives last Congress 
     with over 300 bipartisan votes. With more states legalizing 
     some form of cannabis use, we are hopeful that H.R. 1996 will 
     once again receive a favorable and strong bipartisan vote.
       Since 1996, voters across the country have determined that 
     it is appropriate to allow their citizens to use cannabis for 
     medical purposes and, since 2012, for adult use. Currently, 
     36 states have legalized cannabis for medical or adult use 
     and that number continues to grow. Nevertheless, current 
     federal law prevents banks from safely banking cannabis 
     businesses, as well as the ancillary businesses that provide 
     them with goods and services.
       As a result, a majority of states are struggling to address 
     the significant challenges to public safety, as well as 
     regulatory and tax compliance that go hand-in-hand with 
     businesses forced to operate in an all-cash environment. 
     Providing a mechanism for the cannabis industry to access the 
     banking system would help those communities reduce cash-
     motivated crimes, increase the efficiency of tax collections, 
     and improve the financial transparency of the cannabis 
     industry. Since bank accounts are monitored in accordance 
     with existing anti-money laundering and Bank Secrecy Act 
     requirements, bringing cannabis-related legitimate businesses 
     into the mainstream banking sector would also help law 
     enforcement to identify suspicious transactions--an 
     opportunity that is not available in an all-cash environment.
       ABA does not take a position on the legalization of 
     cannabis. Nevertheless, our member banks find themselves in a 
     difficult situation due to the conflict between state and 
     federal law, with local communities encouraging them to bank 
     cannabis businesses and federal law prohibiting it. Congress 
     must act to resolve this conflict between state and federal 
     law.
       The Controlled Substances Act (21 U.S.C. Sec. 801 et seq.) 
     classifies cannabis as an illegal drug and prohibits its use 
     for any purpose. For banks, that means that all proceeds 
     generated by a cannabis-related business, even when it is 
     operating in compliance with state law, are unlawful proceeds 
     under federal law, and so any attempt to conduct a financial 
     transaction with that money (including simply accepting a 
     deposit) can be considered money-laundering. All banks, 
     whether state or federally chartered, are subject to federal 
     anti-money laundering laws. And, all banks must have access 
     to the federal payment system to operate, which is under the 
     purview of federal authority. Thus, banking entities related 
     to the cannabis business can pose significant regulatory 
     sanction risk, loss of access to the payments system, and the 
     potential loss of the bank charter itself. This places banks 
     in an untenable position in dealing with these state-
     authorized businesses.
       Currently, the only direction available to financial 
     institutions in connection with cannabis-related accounts 
     comes from guidance issued by the Financial Crimes 
     Enforcement Network (FinCEN) in 2014. That guidance, which 
     references a now rescinded memorandum from the U.S. 
     Department of Justice (the ``Cole Memo''), describes how 
     financial institutions can report cannabis-related business 
     activity consistent with their Bank Secrecy Act obligations. 
     It does not create a safe harbor or otherwise modify federal 
     law to protect banks from criminal and civil liability for 
     money laundering. It merely creates a system for reporting 
     activity that is illegal under federal law but otherwise 
     legal under state law.
       Although some financial institutions have weighed the 
     prevailing climate of non-enforcement and have decided to 
     shoulder the risk in order to serve the needs of their 
     communities, the majority of financial institutions will not 
     take the legal, regulatory, or reputational risk associated 
     with banking cannabis-related businesses without 
     congressional action. As a result, state-legal businesses are 
     being excluded from the mainstream financial system.
       The problems, though, are not limited to those businesses 
     that have direct contact with the marijuana plant, such as 
     growers and dispensaries. The impact of the divide between 
     state and federal law extends to any person or business that 
     derives revenue from a cannabis firm--including real estate 
     owners, security firms, utilities, vendors and employees of 
     cannabis businesses, as well as investors. As the legal 
     state-cannabis industry continues to grow, the indirect 
     connections to cannabis revenues will also continue to 
     expand. Without greater clarity, that entire portion of 
     economic activity in legal cannabis states will continue to 
     be marginalized from the banking system.
       The bipartisan SAFE Banking Act would be an important step 
     toward enabling financial services for cannabis-related 
     businesses. The bill specifies that proceeds from a 
     legitimate cannabis business would not be considered unlawful 
     under federal money laundering statutes or any other federal 
     law, which is necessary to allow the provision of financial 
     services to cannabis-related legitimate businesses as well as 
     any ancillary businesses that derive some portion of their 
     income from those businesses. The bill would also direct 
     FinCEN, and the federal banking regulators through the 
     Federal Financial Institutions Examination Council, to issue 
     guidance and exam procedures for banks doing business with 
     cannabis-related legitimate businesses. Explicit, consistent 
     direction from federal financial regulators will provide 
     needed clarity for banks and help them better evaluate the 
     risks and supervisory expectations for cannabis-related 
     customers. The SAFE Banking Act is not a cure all for the 
     cannabis banking challenge, but it is a measure that helps 
     clarify many issues for the banking industry and regulators.
       ABA is pleased to support the SAFE Banking Act and urges 
     members of the House of Representatives to vote in favor of 
     this legislation when it is brought up on this week's 
     suspension calendar.
           Sincerely,
     Rob Nichols.
                                  ____

                                               American Council of


                                     Independent Laboratories,

                                   Washington, DC, April 19, 2021.
     U.S. Rep. Perlmutter,
     Washington, DC.
       Dear Rep. Perlmutter: I write today on behalf of the 
     American Council of Independent Laboratories (ACIL) in strong 
     support of H.R. 1996, the Secure and Fair Enforcement Banking 
     Act (SAFE Banking Act) of 2021.
       ACIL is an association representing independent commercial 
     scientific and engineering firms with over 1,000 facilities 
     across the U.S. engaged in testing, product certification, 
     consulting, and research and development to enhance public 
     health and safety.
       This bipartisan legislation would provide safe harbor to 
     financial institutions doing business with the state-legal 
     cannabis industry. Since 1996, 47 states, four U.S. 
     territories, and the District of Columbia have legalized some 
     form of recreational or medical marijuana, including hemp and 
     CBD products. However, cannabis remains illegal under the 
     federal Controlled Substances Act, individuals who grow, 
     possess, use, sell, transport, or distribute cannabis remain 
     subject to federal criminal prosecution. Your legislation 
     seeks to harmonize federal and state law by prohibiting 
     federal regulators from taking punitive measures against 
     depository institutions that provide banking services to 
     legitimate cannabis-related businesses engaged in 
     manufacturing, growing, or producing, as well as any business 
     who handles, sells, transports, displays or distributes 
     cannabis or cannabis products.
       ACIL does not take a position on the legalization of 
     cannabis, but our membership find themselves in a quandary 
     due to the conflict between state and federal law.
       Based upon the above, ACIL is pleased to support your SAFE 
     Banking Act and we look forward to its passage in the U.S. 
     Congress. Thank you for your time and attention. Please do 
     not hesitate to call upon me if you have any questions.
           Sincerely,
                                                   Richard Bright,
                                          Chief Operating Officer.

[[Page E435]]

     
                                  ____
                                                     April 1, 2021
     Hon. Nancy Pelosi,
     Speaker of the House,
     Washington, DC.
     Hon. Charles E. Schumer,
     Majority Leader,
     Washington, DC.
     Hon. Steny Hoyer,
     Majority Leader,
     Washington, DC.
     Hon. James E. Clyburn,
     Majority Whip,
     Washington, DC.
     Hon. John Thune,
     Minority Whip,
     Washington, DC.
     Hon. Patrick J. Toomey,
     Ranking Member, Senate Committee on Banking, Housing, & Urban 
         Affairs, Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader,
     Washington, DC.
     Hon. Mitch McConnell,
     Minority Leader,
     Washington, DC.
     Hon. Steve Scalise,
     Minority Whip,
     Washington, DC.
     Hon. Richard J. Durbin,
     Majority Whip,
     Washington, DC.
     Hon. Sherrod Brown,
     Chair, Senate Committee on Banking, Housing, & Urban Affairs, 
         Washington, DC.
       Dear Congressional Leaders: We are a bipartisan group of 
     state and territorial attorneys general committed to public 
     safety, financial transparency, and the rule of law. On May 
     8, 2019, 38 state and territorial attorneys general urged 
     passage of the Safe and Fair Enforcement (``SAFE'') Banking 
     Act, or similar legislation, providing access to the 
     regulated banking system for marijuana-related businesses in 
     states with robust regulatory controls that ensure 
     accountability in the marijuana industry. The undersigned 
     attorneys general reiterate that support here and encourage 
     Congress to take action expeditiously.
       During the November 2020 election, voters in multiple 
     states approved ballot measures to regulate cannabis for 
     medical and/or adult use. Currently, forty-seven states, the 
     District of Columbia, and four U.S. territories have 
     legalized some form of recreational or medical cannabis use 
     (including CBD/low THC). In short, it is clear that legalized 
     cannabis is here to stay.
       In forty-seven states, the District of Columbia, and four 
     territories, cannabis is regulated through responsible and 
     robust regulatory programs. Nonetheless, federal law 
     currently inhibits the ability of national financial 
     institutions to provide banking and other financial services 
     to cannabis-related businesses operating lawfully under state 
     regulations. Without access to traditional financial 
     services, these businesses operate exclusively or primarily 
     in cash, making those businesses targets for criminal 
     activity and hindering efforts to ensure regulatory and tax 
     compliance and track financial flows. This status quo--a 
     rapidly expanding, multibillion-dollar national marketplace 
     without access to the national banking systems--is untenable.
       As we noted in our May 2019 letter to the congressional 
     leadership, passage of the SAFE Banking Act or similar 
     legislation, in no way constitutes an endorsement of any 
     state or territory's specific approach to the legalization of 
     marijuana-related transactions, and the Act is in no way an 
     endorsement for the legalization of medical or retail 
     marijuana in those jurisdictions that choose not to pursue 
     such an approach. But regardless of how individual 
     policymakers feel about states permitting the use of medical 
     or recreational marijuana, the reality of the situation 
     requires federal rules that permit a sensible banking regime 
     for legal businesses.''
       We further emphasized that passage of this legislation 
     ``reflects a recognition of the realities on the ground and 
     an embrace of our federalist system of government that is 
     flexible enough to accommodate divergent state approaches.''
       To address an untenable status quo and recognize on the 
     ground realities, we strongly urge the House of 
     Representatives and Senate to promptly take up and act upon 
     the SAFE Banking Act. Our states' ability to protect public 
     safety and properly regulate this new and growing industry 
     depends on Congress enacting this vital legislation.
           Respectfully,
                                                      Phil Weiser,
                                        Colorado Attorney General.
                                                  Wayne Stenehjem,
                                    North Dakota Attorney General.
                                                   Karl A. Racine,
                            District of Columbia Attorney General.
                                                        Dave Yost,
                                            Ohio Attorney General.
                                  ____
                                  
                                     American Bankers Association,


                                    Building Success Together,

                                   Washington, DC, March 17, 2021.
     Hon. Ed Perlmutter,
     Member of Congress,
     Washington, DC.
     Hon. Nydia M. Velazquez,
     Member of Congress,
     Washington, DC.
     Hon. Steve Stivers,
     Member of Congress,
     Washington, DC.
     Hon. Warren Davidson,
     Member of Congress,
     Washington, DC.
       Dear Representatives Perlmutter, Velazquez, Stivers and 
     Davidson: On behalf of the American Bankers Association 
     (ABA), I am writing to express our support for the Secure and 
     Fair Enforcement Banking Act (SAFE Banking Act) of 2021. We 
     would like to thank you for your efforts to address the 
     conflict between federal and state law and whether banks can 
     serve cannabis and cannabis related businesses. This issue 
     has become a challenge for so many of our nation's 
     communities and the banks that serve them.
       Since 1996, voters across the country have determined that 
     it is appropriate to allow their citizens to use cannabis for 
     medical purposes and, since 2012, for adult use. Currently, 
     36 states have legalized cannabis for medical or adult use 
     and that number continues to grow. Nevertheless, current 
     federal law prevents banks from safely banking cannabis 
     businesses, as well as the ancillary businesses that provide 
     them with goods and services.
       As a result, a majority of states are struggling to address 
     the significant challenges to public safety, as well as 
     regulatory and tax compliance that go hand-in-hand with 
     businesses forced to operate in an all-cash environment. 
     Providing a mechanism for the cannabis industry to access the 
     banking system would help those communities reduce cash-
     motivated crimes, increase the efficiency of tax collections, 
     and improve the financial transparency of the cannabis 
     industry. Since bank accounts are monitored in accordance 
     with existing anti-money laundering and Bank Secrecy Act 
     requirements, bringing cannabis-related legitimate businesses 
     into the mainstream banking sector would also help law 
     enforcement to identify suspicious transactions--an 
     opportunity that is not available in an all-cash environment.
       ABA does not take a position on the legalization of 
     cannabis. Nevertheless, our member banks find themselves in a 
     difficult situation due to the conflict between state and 
     federal law, with local communities encouraging them to bank 
     cannabis businesses and federal law prohibiting it. Congress 
     must act to resolve this conflict between state and federal 
     law.
       The Controlled Substances Act (21 U.S.C. Sec. 801 et seq.) 
     classifies cannabis as an illegal drug and prohibits its use 
     for any purpose. For banks, that means that all proceeds 
     generated by a cannabis-related business, even when it is 
     operating in compliance with state law, are unlawful proceeds 
     under federal law, and so any attempt to conduct a financial 
     transaction with that money (including simply accepting a 
     deposit) can be considered money-laundering. All banks, 
     whether state or federally chartered, are subject to federal 
     anti-money laundering laws. And, all banks must have access 
     to the federal payment system to operate, which is under the 
     purview of federal authority. Thus, banking entities related 
     to the cannabis business can pose significant regulatory 
     sanction risk, loss of access to the payments system, and the 
     potential loss of the bank charter itself. This places banks 
     in an untenable position in dealing with these state-
     authorized businesses.
       Currently, the only direction available to financial 
     institutions in connection with cannabis-related accounts 
     comes from guidance issued by the Financial Crimes 
     Enforcement Network (FinCEN) in 2014. That guidance, which 
     references a now rescinded memorandum from the U.S. 
     Department of Justice (the ``Cole Memo''), describes how 
     financial institutions can report cannabis-related business 
     activity consistent with their Bank Secrecy Act obligations. 
     It does not create a safe harbor or otherwise modify federal 
     law to protect banks from criminal and civil liability for 
     money laundering. It merely creates a system for reporting 
     activity that is illegal under federal law but otherwise 
     legal under state law.
       Although some financial institutions have weighed the 
     prevailing climate of non-enforcement and have decided to 
     shoulder the risk in order to serve the needs of their 
     communities, the majority of financial institutions will not 
     take the legal, regulatory, or reputational risk associated 
     with banking cannabis-related businesses without 
     congressional action. As a result, state-legal businesses are 
     being excluded from the mainstream financial system.
       The problems, though, are not limited to those businesses 
     that have direct contact with the marijuana plant, such as 
     growers and dispensaries. The impact of the divide between 
     state and federal law extends to any person or business that 
     derives revenue from a cannabis firm--including real estate 
     owners, security firms, utilities, vendors and employees of 
     cannabis businesses, as well as investors. As the legal 
     state-cannabis industry continues to grow, the indirect 
     connections to cannabis revenues will also continue to 
     expand. Without greater clarity, that entire portion of 
     economic activity in legal cannabis states will continue to 
     be marginalized from the banking system.
       The bipartisan SAFE Banking Act would be an important step 
     toward enabling financial services for cannabis-related 
     businesses. The bill specifies that proceeds from a 
     legitimate cannabis business would not be considered unlawful 
     under federal money laundering statutes or any other federal 
     law, which is necessary to allow the provision of financial 
     services to cannabis-related legitimate businesses as well as 
     any ancillary businesses that derive some portion of their 
     income from those businesses. The bill would also direct 
     FinCEN, and the federal banking regulators through the 
     Federal Financial Institutions Examination Council, to issue

[[Page E436]]

     guidance and exam procedures for banks doing business with 
     cannabis-related legitimate businesses. Explicit, consistent 
     direction from federal financial regulators will provide 
     needed clarity for banks and help them better evaluate the 
     risks and supervisory expectations for cannabis-related 
     customers. The SAFE Banking Act is not a cure all for the 
     cannabis banking challenge, but it is a measure that helps 
     clarify many issues for the banking industry and regulators.
       ABA is pleased to support the SAFE Banking Act and urges 
     the House Financial Services Committee to approve this 
     legislation and for the full House of Representatives to 
     quickly consider this important measure.
           Sincerely,
     Rob Nichols.
                                  ____

                                                American Financial


                                         Services Association,

                                                   March 16, 2021.
     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 the Secure and Fair 
     Enforcement (SAFE) Banking Act of 2021.
       The SAFE Banking Act, sponsored by Representatives Ed 
     Perlmutter (D-CO), Nydia Velazquez (D-NY), Steve Stivers (R-
     OH) and Warren Davidson (R-OH), had strong bipartisan support 
     in the 116th Congress with 206 cosponsors, and passed the 
     House 321-103. This legislation 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 that 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 
     affected. No legal business should be targeted solely based 
     on the political bias of a particular administration.
       Even after Operation Choke Point officially ended, its 
     effects remained. Financial services companies that are 
     licensed and regulated still had their accounts closed with 
     very little explanation. 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.
       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, not political bias. We urge members of the House of 
     Representatives to support the SAFE Banking Act.
           Sincerely,
                                                    Celia Winslow,
                                            Senior Vice President,
     American Financial Services Association.

                          ____________________