Supporting H.R. 1996
Floor Speech
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Mr. PERLMUTTER. Madam Speaker, I include in the Record the following letters of endorsement for H.R. 1996, the SAFE Banking Act of 2021. April 19, 2021. Hon. Charles E. Schumer, Majority Leader, Washington, DC. Hon. Mitch McConnell, Minority Leader Washington, DC. Hon. Nancy Pelosi, Speaker of the House, Washington, DC. Hon. Kevin McCarthy, Minority Leader, Washington, DC. Hon. Sherrod Brown, Chair, Senate Committee on Banking, Housing and Urban Affairs, Washington, DC. Hon. Pat Toomey, Ranking Member, Senate Committee on Banking, Housing and Urban Affairs, Washington, DC. Hon. Maxine Waters, Chair, House Committee on Financial Services, Washington, DC. Hon. Patrick McHenry, Ranking Member, House Committee on Financial Services, Washington, DC.
Dear Congressional Leaders: As our States' chief executives, we urge Congress to pass legislation allowing states with legalized medical or adult-use cannabis to operate safely under the national banking system. We strongly support the passage of the Secure and Fair Enforcement (SAFE) Banking Act of 2021 (H.R. 1996/S. 910) or similar legislation that would remove the legal uncertainty and allow banks and credit unions to provide services to state-licensed cannabis- related businesses.
We were pleased that the House passed similar legislation in the 116th Congress (H.R. 1595). The SAFE Banking Act of 2021 already has more than 165 bipartisan House cosponsors and more than 30 bipartisan Senate cosponsors. The legislation has also received support from more than 30 associations.
Currently, 36 U.S. states, four U.S. territories, and the District of Columbia have legalized the medical use of cannabis. Additionally, 18 states, two territories, and the District of Columbia have legalized recreational use by adults over 21 years of age. Despite legalization of cannabis at the state-level, our financial institutions face enormous legal risks and criminal and civil liability under the Controlled Substances Act. These barriers disincentive financial institutions from providing banking services to state-licensed and regulated cannabis businesses.
Because few banks and credit unions provide these services, state-licensed cannabis businesses predominantly operate on a cash basis. Without banking services, state-licensed cannabis businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards. Cash only businesses pose a significant public safety risk to customers and employees. The cash-only environment also burdens state and local government agencies that must collect tax and fee payments in person and in cash, which creates additional public expenses and employee safety risks.
State and federal governments have a shared interest in upholding the rule of law, protecting public safety, and transitioning markets out of the shadows and into our transparent and regulated banking system. Many of our states have implemented laws and regulations to reduce these risks while ensuring financial accountability of the cannabis industry. These public safety risks can be further mitigated on the federal level by passing the SAFE Banking Act to provide state-licensed cannabis businesses with access to banking service providers.
We urge you to pass the SAFE Banking Act of 2021 or similar legislation that would provide a safe harbor for depository institutions that provide a financial product or service to a state-licensed cannabis business in states that have legalized cannabis. We look forward to working with you as legislation progresses to address this urgent public policy and safety concern. Sincerely, Governor Jared Polis, State of Colorado; Governor Gavin Newsom, State of California; Governor Ned Lamont, State of Connecticut; Governor JB Pritzker, State of Illinois; Governor John Bel Edwards, State of Louisiana; Governor Janet Mills, State of Maine; Governor Charlie Baker, State of Massachusetts; Governor Gretchen Whitmer, State of Michigan; Governor Steve Sisolak, State of Nevada; Governor Phil Murphy, State of New Jersey; Governor Michelle Lujan Grisham, State of New Mexico; Governor Andrew Cuomo, State of New York; Governor Doug Burgum, State of North Dakota; Governor Kate Brown, State of Oregon; Governor Tom Wolf, State of Pennsylvania; Governor Spencer Cox, State of Utah; Governor Albert Bryan, Territory of U.S. Virgin Islands; Governor Ralph Northam, State of Virginia; Governor Jay Inslee, State of Washington; Governor Jim Justice, State of West Virginia; Governor Tony Evers, State of Wisconsin. ____ 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 undersigned state bankers associations, representing banks of all sizes; we write to express our support for H.R. 1996, the Secure and Fair Enforcement Banking Act (SAFE Banking Act) of 2021. This strongly bipartisan legislation scheduled for consideration on this week's suspension calendar would be an important step to address the conflict between federal and state laws and how banks safely work with legal cannabis and cannabis related businesses.
Although we do not take a position on the legalization of marijuana, our members are committed to serving the financial needs of their communities--including those that have voted to legalize cannabis. Currently, 36 states covering 70 percent of the nation's population have legalized cannabis for medical or adult-use. Despite this ever-growing voter preference, current federal law continues to prevent banks from safely banking these businesses without fear of federal sanctions. As a result, this segment of our local economies is forced to operate on an all-cash basis, which creates serious public safety, revenue administration, and legal compliance concerns in the communities we serve.
The impact on our local economies could also prove significant, as revenue paid to unrelated industries that provide products and services to state-authorized cannabis businesses such as law firms, accountants and contractors is technically money derived from illegal activities, and thus could be considered money laundering. This raises the significant question of whether financial institutions can bank these ancillary businesses, as such actions could likewise be considered violations of the money laundering laws. Without a change to federal law, that entire portion of economic activity in legal cannabis states may be marginalized from the banking system.
The SAFE Banking Act is a banking-specific bipartisan solution that would address the reality of the current marketplace and allow banks to serve cannabis-related businesses in states where the activity is legal.
We urge members of the House of Representatives to support H.R. 1996, the SAFE Banking Act, when this bill comes before the House on this week's suspension calendar. Sincerely,
Alabama Bankers Association, Alaska Bankers Association, Arizona Bankers Association, Arkansas Bankers Association, California Bankers Association, Colorado Bankers Association, Connecticut Bankers Association, Delaware Bankers Association, Florida Bankers Association, Georgia Bankers Association, Hawaii Bankers Association, Idaho Bankers Association, Illinois Bankers Association, Indiana Bankers Association, Iowa Bankers Association.
Kansas Bankers Association, Kentucky Bankers Association, Louisiana Bankers Association, Maine Bankers Association, Maryland Bankers Association, Massachusetts Bankers Association, Michigan Bankers Association, Minnesota Bankers Association, Mississippi Bankers Association, Missouri Bankers Association, Montana Bankers Association, Nebraska Bankers Association, Nevada Bankers Association, New Hampshire Bankers Association, New Jersey Bankers Association.
New Mexico Bankers Association, New York Bankers Association, North Carolina Bankers Association, North Dakota Bankers Association, Ohio Bankers League, Oklahoma Bankers Association, Oregon Bankers Association, Pennsylvania Bankers Association, Puerto Rico Bankers Association, Rhode Island Bankers Association, South Carolina Bankers Association, South Dakota Bankers Association, Tennessee Bankers Association, Texas Bankers Association, Utah Bankers Association, Vermont Bankers Association, Virginia Bankers Association, Washington Bankers Association, West Virginia Bankers Association, Wisconsin Bankers Association, Wyoming Bankers Association. ____ US Cannabis Council, Washington, DC, April 19, 2021. Hon. Ed Perlmutter, Member of Congress, Washington, DC. Hon. Steve Stivers, Member of Congress, Washington, DC. Hon. Nydia M. Velazquez, Member of Congress, Washington, DC. Hon. Warren Davidson, Member of Congress, Washington, DC.
Dear Representatives Perlmutter, Velazquez, Stivers and Davidson: On behalf of the United States Cannabis Council (USCG), I write to you to support the swift passage of H.R. 1996, also known as the SAFE Banking Act.
The SAFE Banking Act addresses a crucial problem within the emerging cannabis industry: access to regulated financial services. As states continue to legalize cannabis, opening new economic opportunities for business owners, one problem continues to persist--Black Americans and other racial minorities are precluded from the state-legal industry due to a lack of financing and barriers to entry.
By protecting banking institutions that extend financial services to the cannabis industry, existing operators and minority-owned businesses seeking access into the industry benefit from access to institutional capital. Indeed, today's situation is reminiscent of a previous era in which minorities were routinely redlined out of access to banking credit, capital, and cash. The SAFE Banking Act would alleviate the problem of minority equity and access with the cannabis industry in crucial ways. Further, it protects the 321,000 employees directly affected by the cannabis industry's lack of access and whose retirement, insurance, and banking accesses are constantly in peril.
It is imperative that the SAFE Banking Act is passed by the House of Representatives. In doing so, the House would take a meaningful first step in establishing a more equitable cannabis industry within the US, ensuring minorities that were most affected by the War on Drugs are properly represented. The US Cannabis Council voices its support for H.R. 1996 and commends the bill authors and Speaker Pelosi for your and her attention to this important issue. Sincerely, Steven W. Hawkins, Interim President & CEO, U.S. Cannabis Council.
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