The New Role of Operations Workgroup convened on October 29 to continue discussions around the shifting role of operations as the global pandemic continues to effect widespread changes. Guest speaker Bill Sullivan, Senior Director and Group Manager, Government and Industry Relations at Nacha, provided Workgroup members with an overview of recent developments on Capitol Hill, including new developments in cannabis banking.
SAFE Banking Act of 2021
“We’re getting really close to passing some sort of cannabis banking law,” Sullivan said. “It appears as if the Senate…will pass the National Defense Authorization Act (NDAA), and within that, it is quite likely that the House language for safe banking, allowing for states that have cannabis businesses to legally bank customers, will pass.”
The Safe Banking Act of 2021 (HR.R. 1996) passed in the House on April 19, 2021, and is now in the Senate. According to Congress.gov, the bill generally prohibits a federal banking regulator from penalizing a depository financial institution for providing banking services to a legitimate cannabis-related business.
Sullivan shared that several marijuana reform groups and marijuana banking groups have financial institution members, including the ICBA. The ICBA was the first national banking trade group to support the SAFE Banking Act and to testify before Congress on its behalf..
While ICBA is a major force behind this legislation, the American Bankers Association, the Credit Union National Association, and other financial institution organizations also support the SAFE Banking Act.
ADVOCATING FOR THE ACH NETWORK
Sullivan's primary role at Nacha is advocating for the ACH Network and making sure that the members of Congress and the regulators understand how Nacha makes the rules, what the rules are doing, why Nacha is changing or creating a new rule, and the growth of the Network overall.
To that end, Nacha launched DirectDepositDelivers.org, a campaign designed to remind policymakers, whether at the federal government or congressional level, of the importance of the ACH Network. This includes tax refunds, Social Security benefits, economic impact payments, veterans’ benefits, Child Tax Credit payments, and more.
Most recently, the U.S. Internal Revenue Service (IRS) sent over 430,000 Advance Child Tax Credit (ACTC) payments by Same Day ACH to reach the majority of families that had received ACTC payments in July and August but didn’t receive their September payments.
“We’ve been working very closely with treasury, IRS, and fiscal services throughout the pandemic payments, said Sullivan. “We’re proud of the role we play in educating the government on the use of the ACH Network, advising them, and, most recently, getting the federal government with child tax credit payments to use notification of change (NOC). With NOC, their return rate dropped tremendously.”
While Nacha is impacting the Hill, Sullivan is quick to point out that government relations are not the primary focus of Nacha. The role of Nacha is to promote the ACH Network.
"My role is to continually update members, particularly the senate banking committee and house financial services committee," said Sullivan. "They're the committees that oversee anything payments or ACH-related. Our role is to promote Network."
UPDATE: SAFE Banking Act of 2021
Sullivan has since informed us that the Senate could not find a path forward on the NDAA, the vehicle that potentially could have included the SAFE Banking Act. Despite the NDAA moving forward in a bipartisan manner for many years, there were a number of concerns raised by Republicans who are seeking votes on various amendments and legislation. These issues led to a more stringent process that made it difficult to include non-defense related items, such as cannabis. As a result, the Senate did not include the SAFE Banking Act in its version of the NDAA as an amendment approved last week.
The SAFE Banking Act did not move forward as part of the NDAA, although it could potentially become part of an omnibus spending bill sometime early set year.
NEACH will continue to follow this issue and update its members as additional information becomes available.
NEW ROLE OF OPERATIONS WORKGROUP
In addition, the New Role of Operations Workgroup will continue to explore legislation on Capitol Hill, along with other factors, including technology, the digitization of payments, and more, that are impacting the role of operations in financial institutions and the business of banking in an ever-changing environment.
For more information on the Workgroup’s findings to date, download the New Role of Operations White Paper at neach.org.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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