[Congressional Record Volume 167, Number 73 (Wednesday, April 28, 2021)]
[Extensions of Remarks]
[Pages E460-E462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          SUPPORTING H.R. 1996

                                 ______
                                 

                          HON. WARREN DAVIDSON

                                of ohio

                    in the house of representatives

                       Wednesday, April 28, 2021

  Mr. DAVIDSON. Madam Speaker, I include in the Record the following 
letters of endorsement for H.R. 1996, the SAFE Banking Act of 2021.
                                                   Law Enforcement


                                           Action Partnership,

                                      Medford, MA, March 17, 2021.
     RE SAFE Banking Act--Position: Support.

     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: 
Thank you for the opportunity to once again participate in this 
historic discussion of the SAFE Banking Act. LEAP's previous executive 
director, Major Neill Franklin (Ret.), was honored to have testified in 
the subcommittee hearing in 2019 and we would like to affirm our 
ongoing support of this important bill.
  I spent 21 years in law enforcement, and upon leaving, I continued to 
serve the public. My mission has always been, and will always be, to 
promote safety and justice. As the executive director of the Law 
Enforcement Action Partnership (LEAP), a nonpartisan, nonprofit of 
police prosecutors, judges and other criminal justice professionals, 
I've helped ensure our mission is to mobilize the voice of law 
enforcement in support of policies that will make us all safer.
  At a time when more than a dozen states have voted to regulate and 
control marijuana, and dozens more have implemented programs for 
medical marijuana, it is beyond time for the federal government to 
update the banking system to support these democratic choices.
  When my predecessor testified in 2019, he told the story of a 
dispensary owner from Orange County, California, who was kidnapped, 
tortured, permanently mutilated, and left for dead. By the grace of 
God, he survived this despicable act of violence, but the conditions 
under which marijuana industry workers risk similar victimization 
persist.
  The conditions persist because one of the fastest growing markets in 
the country has nowhere to legally put its money. When thieves know a 
business is operating in cash, it becomes a fairly simple matter to 
target the owners and employees. Suddenly, something as mundane as 
making a tax payment becomes a potentially lethal situation.
  This lack of regulatory framework is precisely why voters have made 
the drug legal in some parts of the country. Underground markets enrich 
criminals at the expense of everyone's safety. We cannot simply 
acknowledge marijuana is now legal in some states or look the other way 
while it happens; we have to build a model for how to keep people safe 
while voters decide to move the industry above-ground.
  Police agencies can access financial records more easily when the 
transactions are documented in secure banking records. Banks can assist 
with investigations by flagging suspicious activity and alerting 
authorities to businesses that may be involved in organized crime. 
Financial records are used to locate people, estimate the size of an 
organization, and build cases against hardened criminals. A well-known 
example is Al Capone, who, after a lifetime of notoriety, was finally 
arrested for tax-evasion. When marijuana businesses have to work with 
cash, banks have limited ability to flag suspicious activity--and 
otherwise legal businesses are more likely to be overrun by cartels in 
the absence of a paper trail.
  I'm not one for fear mongering--what I testify to 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.
  The SAFE Banking Act presents us with an opportunity to help 
stabilize the marijuana industry and enhance public safety. I believe 
it is my responsibility as a lifelong public servant to stay involved 
in this legislation to the very end.
  Thank you for your time and for bringing the SAFE Banking Act to a 
vote.
           Respectfully,

                                              Lieutenant Diane

                                             Goldstein (Ret.),

                                               Executive Director,
     Law Enforcement Action Partnership (LEAP).
                                  ____

                                                     Mountain West


                                     Credit Union Association,

                                       Denver, CO, March 18, 2021.
     Congressman Ed Perlmutter.
     Washington, DC.
       Dear Congressman Perlmutter: I write to you today in 
     support of the Secure and Fair Enforcement (SAFE) Banking Act 
     of 2021. This legislation provides important protections for 
     our credit unions that wish to provide financial services to 
     legal entities in their states.
       As financial services providers serving nearly 4 million 
     members in Arizona, Colorado and Wyoming, credit unions play 
     a central role in our communities by fulfilling banking needs 
     that may not be otherwise available. Currently, however, we 
     cannot serve an industry that generates several billion 
     dollars in sales and tax revenues--the recreational cannabis 
     industry--without substantial risk due to ongoing uncertainty 
     over federal enforcement of the Controlled Substances Act. 
     This has become not only a states' rights issue, but an 
     important public safety issue. Without access to standard 
     banking services, some of these companies have had to come up 
     with alternative solutions. Many are unable to undertake the 
     most basic functions of successful businesses, such as paying 
     vendors, employees, and taxes, but instead have large amounts 
     of money unsecured, unaccountable and at risk for abuse.
       The SAFE Banking Act would provide the safe harbor we need 
     as financial services providers to service this growing 
     industry and protect our members and the taxpayers of our 
     states. This is a matter independent of the question of 
     legalization of cannabis and is about ensuring that legal 
     businesses have the basic financial services they need for 
     compliance and accountability.

[[Page E461]]

       Thank for your leadership on this issue. We hope Congress 
     will take swift action to address this matter and pass the 
     SAFE Banking Act without delay.
           Sincerely,

                                                   Scott Earl,

                                                    President/CEO,
     Mountain West Credit Union Association.
                                  ____

          National Association of Federally-Insured Credit Unions,
                                    Arlington, VA, April 19, 2021.
     Re H.R. 1996, the SAFE Banking Act of 2021.

     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi and Leader McCarthy: I write to you 
     today on behalf of the National Association of Federally-
     Insured Credit Unions (NAFCU) in conjunction with the House's 
     scheduled vote on H.R. 1996, the SAFE Banking Act of 2021, to 
     urge the House to support this legislation. NAFCU advocates 
     for all federally-insured not-for-profit credit unions that, 
     in turn, serve over 124 million consumers with personal and 
     small business financial service products.
       As you are aware, the vast majority of states have 
     authorized varying degrees of marijuana use, ranging from 
     limited medical use to decriminalization and recreational use 
     at the state-level. NAFCU has heard from a number of our 
     member credit unions in these states that they are being 
     approached by their members, or potential members, that have 
     a small business in or are serving the legal cannabis 
     industry in their state and are seeking banking services for 
     their small business.
       As the cultivation, sale, distribution, and possession of 
     marijuana remains illegal at the federal level under Schedule 
     I of the Controlled Substances Act, the majority of credit 
     unions remain hesitant to provide financial services to these 
     members and their small businesses. While the 2013 memo from 
     U.S. Deputy Attorney General James M. Cole (``Cole Memo'') 
     and the 2014 guidance from FinCEN have attempted to provide 
     clarity to financial institutions, uncertainty remains for 
     financial institutions in this area. Guidance can be 
     rescinded at any time and in fact, former Attorney General 
     Jeff Sessions took action in 2018 to essentially rescind the 
     ``Cole Memo.'' For financial institutions, such as credit 
     unions, there are additional regulatory challenges that 
     compound the uncertainty of providing financial services to 
     state-authorized marijuana-related businesses (MRBs). These 
     go beyond just concerns about criminal or civil penalties, 
     but also extend to requirements related to proper Suspicious 
     Activity Report (SAR) and anti-money laundering (AML) filings 
     as required under the Bank Secrecy Act, access to federal 
     deposit insurance and a Federal Reserve master account, and 
     even potential issues with the Internal Revenue Service 
     (IRS). Missteps in these areas could prove devastating to an 
     institution. It should be noted that these risks also exist 
     when providing financial services to ancillary businesses 
     that provide products and services to MRBs and fall within 
     the credit union's field of membership, even if the state-
     authorized MRB does not
       NAFCU does not have, and is not taking, a position on the 
     broader question of the legalization or decriminalization of 
     marijuana at any degree at the federal or state level. 
     However, we do support Congress taking the steps found in 
     H.R. 1996 to provide greater clarity and legal certainty at 
     the federal level for credit unions that choose to provide 
     financial services to state-authorized MRBs and ancillary 
     businesses that may serve those businesses in states where 
     such activity is legal. While H.R. 1996 does not address 
     every issue on this front, it seeks to provide a safe harbor 
     for financial institutions that wish to serve such businesses 
     and would be an important step towards improving clarity and 
     addressing what is often perceived as misalignment between 
     federal and state laws. It is with this in mind that NAFCU 
     urges you to support the SAFE Banking Act of 2021 when it 
     comes before the House.
       Thank you for your attention to this important issue. We 
     look forward to continuing to work with you on this and other 
     issues of importance to credit unions. Should you have any 
     questions or require any additional information, please do 
     not hesitate to contact me or Sarah Jacobs, NAFCU's Associate 
     Director of Legislative Affairs.
           Sincerely,
                                                      Brad Thaler,
     Vice President of Legislative Affairs.
                                  ____

                                           National Association of


                                             State Treasurers,

                                   Washington, DC, April 14, 2021.
     Hon. Sherrod Brown,
     Chair, Committee on Banking,
     U.S. Senate, Washington, DC.
     Hon. Maxine Waters,
     Chair, Committee on Financial Services,
     House of Representatives, Washington, DC.
     Hon. Pat Toomey,
     Ranking Member, Committee on Banking,
     U.S. Senate, Washington, DC.
     Hon. Patrick McHenry,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Senator Brown, Senator Toomey, Representative Waters 
     and Representative McHenry: On behalf of the nation's State 
     Treasurers, I wanted to thank you for your leadership on 
     critical state finance issues and to express our support for 
     the Secure and Fair Enforcement (SAFE) Banking Act of 2021 
     (H.R. 1996). While we do not take any formal position on 
     efforts to expand the legality of cannabis--medical or 
     recreational--our association remains concerned by the 
     ancillary effects posed by legitimate participants in the 
     industry lacking reliable access to the federally regulated 
     banking system.
       By July of this year, 15 states and the District of 
     Columbia will have legalized adult use cannabis, and 36 
     states will have legalized access to medical cannabis. 
     Nonetheless, conflicts between federal banking laws and state 
     cannabis laws create unsafe conditions where many cannabis 
     related businesses rely on cash-only business models, despite 
     otherwise fully complying with their state's health and 
     safety rules. Unbanked cannabis businesses are frequently 
     unable to write checks, make and receive electronic payments, 
     utilize payroll providers, accept debit or credit cards, or 
     pay taxes through a financial institution. The condition 
     makes tax collection more difficult and burdensome for both 
     businesses and governments, and substantially increases the 
     likelihood of tax fraud. The inability to access banking 
     services not only directly impacts cannabis businesses, but 
     also the secondary service providers in our states who do 
     business with them.
       The National Association of State Treasurers continues to 
     support commonsense federal laws and regulations to provide 
     essential banking services to legitimate cannabis businesses, 
     promote public safety and financial transparency, and 
     facilitate tax and fee collection without compromising 
     federal enforcement of anti-money laundering laws against 
     criminal enterprises. To that extent, we fully support the 
     key elements of the SAFE Banking Act that comport with our 
     association's policy as outlined in this letter and that is 
     contained in our policy resolution (see attachment). We also 
     thank Rep. Perlmutter, Rep. Stivers, Sen. Merkley, Sen. 
     Daines and all of their colleagues for leading on this issue.
       I have asked our policy director, Brian Egan, to follow up 
     with your offices should you have any questions, comments or 
     concerns. Please consider our members and professional staff 
     as resources to you and your teams.
       Thank you again for your consideration on this matter.
           Sincerely,

                                                 Shaun Snyder,

                                               Executive Director,
     National Association of State Treasurers (NAST).
                                  ____



                             National Association of Realtors,

                                   Washington, DC, March 18, 2021.
     Hon. Ed Perlmutter,
     House of Representatives,
     Washington, DC.
     Hon. Nydia M. Velazquez,
     House of Representatives,
     Washington, DC.
     Hon. Steve Stivers,
     House of Representatives,
     Washington, DC.
     Hon. Warren Davidson,
     House of Representatives,
     Washington, DC.
       Dear Representatives Perlmutter, Stivers, Velazquez, and 
     Davidson: On behalf of the 1.4 million members of the 
     National Association of REALTORS (NAR) and its affiliate, the 
     Institute of Real. Estate Management (IREM), thank you for 
     introducing the ``Secure and Fair Enforcement (SAFE) Banking 
     Act of 2021.'' This bipartisan bill 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, the barriers keeping these state-legal businesses 
     from accessing federally-insured banks can impede their 
     ability to grow while raising safety issues in their 
     communities.
       Thirty-six states have legalized cannabis for medical or 
     recreational use, a number that is expected to continue to go 
     up in the coming years. Despite this, current federal law 
     prevents federally-insured banks from working with cannabis 
     businesses, as well as 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.
       State-legal cannabis businesses require real estate--
     farmland, warehouses, and storefronts--creating multiple 
     contacts to other industries and businesses, each of

[[Page E462]]

     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 
     to 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,

                                               Charlie Oppler,

                                                   2021 President,
     National Association of REALTORS.

                          ____________________