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SUPPORTING H.R. 1996
______
HON. STEVE STIVERS
of ohio
in the house of representatives
Friday, April 30, 2021
Mr. STIVERS. Madam Speaker, I include in the Record the following letters of endorsement for H.R. 1996, the SAFE Banking Act of 2021.
Due Process Institute.
Washington, DC.
Support H.R. 1996--SAFE Banking Act
Due Process Institute supports the SAFE Banking Act, H.R. 1996, and urges you to vote in support of this bipartisan bill when it comes to the House floor this evening.
Nearly every state has legalized a form of marijuana, including medical marijuana or cannabidiol (CBD). Seventeen states and the District of Columbia have either decriminalized marijuana or legalized recreational use for adults. The cannabis industry is growing. The American cannabis industry saw $17.5 billion in sales in 2020, a 46 percent increase over the previous year. The industry, which already supports 250,000 jobs, is expected to continue to grow, particularly as more states legalize marijuana.
Although nearly every state has taken some step to liberalize marijuana laws, Congress has not yet taken action to support their self-governance, which creates a problem for businesses operating legally under state law. Because of the federal treatment of marijuana, the owners or employees of legitimate cannabis-related state businesses are forced to make cash-only sales rather than doing business with federally regulated banks. Additionally, proceeds from any legitimate state cannabis-related business can currently be considered unlawful ``proceeds'' from a crime and subject to federal anti-money laundering and forfeiture laws.
The SAFE Banking Act provides safe harbor and other protections for financial institutions--banks and credit unions--that transact with legitimate cannabis-related and hemp-related businesses. (Hemp was federally legalized in 2018.) The bill also protects ancillary business entities that transact with legitimate cannabis-related legitimate businesses and creates a regulatory framework.
The legislative history of the SAFE Banking Act shows broad bipartisan support. In the 116th Congress, the SAFE Banking Act passed with 229 Democrats and 91 Republicans voting for the bill. The SAFE Banking Act the House will vote on this evening has 168 co-sponsors, boasting diverse support from across the ideological spectrum.
Due Process Institute encourages Members to vote YES on the SAFE Banking Act, H.R.1996.
Due Process Institute is a bipartisan nonprofit that works to honor, preserve, and restore principles of fairness in the criminal legal system.
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Hon. Ed Perlmutter,House of Representatives,Washington, DC.Hon. Nydia Velazquez,House of Representatives,Washington, DC.Hon. Steve Stivers,House of Representatives,Washington, DC.Hon. Warren Davidson,House of Representatives,Washington, DC.Hon. Jeff Merkley,U.S. Senate,Washington, DC.Hon. Steve Daines,U.S. Senate,Washington, DC.
Dear Representatives Perlmutter, Velazquez, Stivers, and Davidson and Senators Merkley and Daines:
On behalf of the members of the Electronic Transactions Association (ETA), I am writing in support of the bipartisan Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act). We appreciate your leadership on addressing the conflict between federal and state laws to allow states that have legalized medical or recreational use of cannabis to bring that commerce into the banking system.
ETA is the leading trade association for the payments technology industry, representing over 500 companies that offer electronic transaction processing products and services. ETA's members include financial institutions, mobile payment service providers, payment processors, mobile wallet providers, and non-bank online lenders that make commercial loans, primarily to small businesses, either directly or in partnership with other lenders. ETA member companies are creating innovative offerings in financial services, revolutionizing the way commerce is conducted with secure, convenient, and rewarding payment solutions and lending alternatives--employing millions of Americans and enabling over $22 trillion in payments in 2019.
Forty-seven states, four U.S. territories, and the District of Columbia have legalized some form of recreational or medical cannabis, including CBD. Yet current law restricts legitimate licensed cannabis businesses from accessing financial industry services and products, resulting in businesses operating in all cash--posing a serious public safety risk for communities.
The conflict between state and federal laws forces businesses to operate on a cash-only basis and has created significant legal and compliance concerns for financial institutions that wish to provide banking services to cannabis related businesses in states where it is currently legal. The SAFE Banking Act would allow legitimate cannabis businesses to access the safety and security of the banking ecosystem in states that have legalized cannabis. This legislation is an important step toward enabling financial services for cannabis-related businesses. By directing FinCEN and the federal banking regulators to issue for financial institutions doing business with cannabis-related legitimate businesses. Having access to the banking system makes it easier for businesses to track revenues for taxation purposes, decreases a public safety threat as cash intensive businesses are often targets for criminal activity, and allows proper tracking of finances for BSA/AML compliance.
ETA takes no position on the legalization or decriminalizing cannabis at the state or federal level for medicinal or recreational uses. However, ETA does support legislation that would resolve the conflict between state and federal laws to allow financial institutions to serve cannabis related businesses in states where these businesses are legal under state law.
ETA is pleased to support the SAFE Banking and urges Congress to quickly consider this important issue.
Sincerely,
Jeff Patchen,Manager of Government Affairs.
____
National Armored Car 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 National Armored Car Association (NACA), I write to express our support for H.R. 1996, the Secure and Fair Enforcement (SAFE) Banking Act of 2021. While NACA's members do not take a position in favor of or opposed to the legalization of cannabis or marijuana, we support H.R. 1996 because it would address the existing conflict between federal and state law with respect to proceeds from marijuana-related businesses and allow for safer transportation, storage and oversite of such proceeds.
Formed in 1929, NACA is a business association that brings together the three major companies of the armored car industry--Brink's, GardaWorld, and Loomis--with a focus on protecting and promoting the common interests of the industry. These three organizations comprise approximately 90% of the armored car industry in the United States, and NACA members have handled virtually every dollar and coin in circulation. They provide secure transportation and cash management services for the Federal Reserve, financial institutions, state and local governments, and private businesses and individuals across the United States and internationally.
Currently thirty-six states and several territories, including the District of Columbia, Guam, and Puerto Rico, have legalized the use of cannabis to some extent. However, federal law prohibits cultivation, distribution, and possession of marijuana imposing significant legal risks to financial institutions and ancillary businesses that might consider providing financial services to the marijuana industry. Consequently, hundreds of millions of dollars in cash are being transported and stored outside our banking system and often without adequate security and oversight. The lack of available vendors to provide secure transport and storage of cash increases the risk of criminal activity that can pose a danger not only to those involved in the cannabis industry, but the general public. H.R. 1996 would provide NACA member companies with the needed legal protection and clarity to safely and securely transport cash in states that have legalized and regulated cannabis.
We urge members of the House to support H.R. 1996.
Sincerely,
Basil Thomson,Executive Director, NACA.
____
Independent Community
Bankers of America,
March 18, 2021.Hon. Ed Perlmutter,House of Representatives,Washington, DC.Hon. Warren Davidson,House of Representatives,Washington, DC.Hon. Steve Stivers,House of Representatives,Washington, DC.Hon. Nydia Velazquez,House of Representatives,Washington, DC.
Dear Representatives Perlmutter, Warren, Stivers, and Velazquez: On behalf of community banks across the country, with more than 52,000 locations, I write to thank you for introducing the Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act). In the last Congress, the SAFE Banking Act passed the House by a broad bipartisan vote. We are pleased to reiterate ICBA 's strong support for this legislation, which is essential for the ongoing ability of community banks to effectively serve their communities.
The 2020 election saw Arizona, Montana, New Jersey, and South Dakota join 12 states and the District of Columbia in fully legalizing adult recreational cannabis use. Virginia followed suit in 2021. Cannabis is legal for medical use in 36 states. As more states legalize cannabis for medical and/or recreational use, it is critically important that cannabis-related businesses (CRBs) have access to services provided by the traditional banking system.
The current conflict between state and federal law with regard to cannabis has created increasingly significant legal and compliance concerns for banks that wish to provide banking services to CRBs in jurisdictions where cannabis is legal. Legal and regulatory uncertainty has curtailed access to the traditional banking system for CRBs and forced them to operate mostly in cash. Cash-only businesses, especially those with a high volume of revenue, pose a significant risk to public safety.
The SAFE Banking Act would create a safe harbor from federal sanctions for financial institutions that serve cannabis-related businesses (CRBs) in states and other jurisdictions where cannabis is legal. Importantly, this safe harbor would extend to banks that serve the many ancillary businesses that serve CRBs such as landlords, accountants, utilities providers, and others that may be paid in funds ultimately derived from cannabis sales. These ancillary businesses may be difficult to identify in states that have legalized cannabis, and potentially create a legal and regulatory challenge for even those banks that choose not to serve CRBs directly.
Thank you for introducing the SAFE Banking Act of 2021. We look forward to working with you to advance this important legislation.
Sincerely,
Rebeca Romero Rainey,President & CEO.
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Insured Retirement Institute,
Washington, DC, March 31, 2021.Hon. Ed Perlmutter,House of Representatives,Washington, DC.Hon. Steve Stivers,House of Representatives,Washington, DC.Hon. Nydia VelazquezHouse of Representatives,Washington, DC.Hon. Warren Davidson,House of Representatives,Washington, DC.
Dear Representatives Perlmutter, Stivers, Velazquez, and Davidson: The Insured Retirement Institute (IRI) writes to express our support for H.R. 1996, the Secure and Fair Enforcement (SAFE) Banking Act of 2021. The bill would provide protection and insulation from liability for both participants and institutions offering and administering retirement plans or individual retirement accounts for the employees of cannabis companies and associated businesses regulated and licensed by a state.
Nearly all the states have enacted laws which have either legalized or decriminalized marijuana for medical and recreational use by individuals. As states continue to legalize cannabis and license and regulate associated industries, projections estimate the legal cannabis industry will reach a value of $100 billion by 2030, a 63.9 percent increase over its 2020 estimated worth. With this projected financial growth, consequently the number of Americans employed in this field is also anticipated to rapidly increase. In their Jobs Report 2021, Leafy found that the legal marijuana industry supports 321,000 full-time equivalent jobs as of January 2021. In 2020 and despite the impacts of the COVID-19 pandemic, the legal cannabis industry saw a 32 percent increase in year-over-year job growth or more than 77,000 jobs. As a result, more Americans are now employed in the legal cannabis industry than as electrical engineers, Emergency Medical Technicians, or dentists.
However, as marijuana remains a Schedule I Substance under the Controlled Substances Act and an illegal substance at the federal level, access to essential financial and banking services is essentially blocked for this growing workforce. The risk of running afoul of provisions contained in the Bank Secrecy Act and federal anti-money laundering laws has left many financial institutions unwilling to provide their services to this industry including the offering of retirement savings plans as a benefit to the employees.
In addition, we are witnessing a continuing shift away from employers providing defined-benefit pensions as a benefit for their employees. As a result, the responsibility of preparing for retirement is being placed squarely on the shoulders of America's workers. However, recent research conducted by IRI has shown that savings rates among workers remain low. In fact, only 45 percent of Baby Boomers and 40 percent of Generation Xers have nothing saved for retirement and of the Millennials with retirement savings, half have saved less than $10,000.
A significant factor contributing to the lack of savings is that most workers do not have access to an employment-based savings plan. Research conducted by the Bureau of Labor Statistics has shown that 60 percent of full-time workers at small and medium-sized businesses--of which many legal cannabis businesses would qualify as--do not have access to one of the many types of employment-based retirement plans.
By simply having access to workplace retirement savings opportunities, workers are more likely to participate and save. According to a report by the PEW Charitable Trust, 72 percent of all workers aged 22 and up who are eligible for participation will enroll in a workplace defined contribution plan when one is offered. Enrollment increases to 85 percent of those 22 and older and eligible if an employer-matching contribution is available. Enabling workers at small and medium-sized businesses--particularly those in an industry growing as rapidly as legal cannabis--will help put more of America's workers on the path toward a financially secured and dignified retirement and help alleviate the anxiety many are feeling about their future financial security during their retirement years.
IRI has a long history of supporting and advocating for the enactment of bipartisan, common-sense solutions to help expand opportunities for workers to save for their retirement. As such, providing clarity and certainty to better facilitate the offering of retirement plans for the workers of legally licensed cannabis companies through the enactment of the SAFE Banking Act was included in our 2021 Federal Retirement Security Blueprint. As Congress considers this legislation to enable greater access to retirement savings for Americans, we welcome the opportunity to work with you and your staff to advance this measure.
We thank you for your leadership in pursuing this legislation.
Sincerely,
Paul Richman,
Chief Government andPolitical Affairs Officer.
____
March 18, 2021.
Dear Representatives Perlmutter, Stivers, Velazquez, and Davidson: We, the undersigned U.S. trade associations, write to express support for the SAFE Banking Act of 2021. Collectively, we represent a majority of the companies, agents, and brokers offering property-casualty, life, title, and reinsurance (collectively, ``insurers'') in the U.S. We appreciate your leadership in seeking needed clarity for insurance transactions related to cannabis businesses 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 inclusion of key language from the Clarifying Law Around Insurance of Marijuana Act, sponsored by Representatives Velazquez and Stivers and Senators Menendez, Paul, and Merkley, the SAFE Banking Act'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.
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 conflicting obligations under federal and state law.
Sincerely,
American Land Title Association (ALTA), American Council of Life Insurers (ACLI), American Property Casualty Insurance Association (APCIA), The Council of Insurance Agents & Brokers (CIAB), 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).
____________________
SOURCE: Congressional Record Vol. 167, No. 75
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