Summary and opinion by Wendy Anderson.
The founders of the Fourth Corner Credit Union were suing the U.S Federal Reserve Bank for the right to become the world’s first bank focused on the Cannabis industry.
Banking has been a major complication in the marijuana industry because of the conflict between the state and federal laws. Last November The U.S. Treasury Department’s FinCEN (Financial Crimes Enforcement Network) provided guidelines to financial institutes that provided services to marijuana businesses. They mainly instructed them to follow their activities closely and to report anything suspicious. This was far from a legal endorsement, however, which is the major reason institutes are uncomfortable letting the dispensaries have accounts.
Christian Sederberg, a partner at the Denver marijuana Law Firm Vicente Sederberg said, “We have moved from a situation where this can’t be done to a situation where we have received guidance from the federal government, but with each progression, we still have technical and fundamental difficulties.” Around 100 banks serve dispensaries total and only a dozen are in Colorado.
In November 2014 the Fourth Corner applied to the Federal Reserve for a master account, and what should take a matter of a few days to approve or deny, took the reserve eight months delay to get back to them only to tell them they were denied because they couldn’t provide the account with deposit insurance.
As a result the Fourth Corner sued both the Federal Reserve and the NCUA. “The federal reserve is not the enforcer of laws,” Mason (the Attorney for the case) said.
The Judge empathized with Mason, however stated that marijuana is still prohibited in the eyes of the law. “This issue for me to decide is, do I force the Federal Reserve Bank to give you a master account?” He told Mason. “The problem I have with that is that I will be forcing the Federal Reserve Bank to give a master account to an institution that has stated it will participate in illegal activity.” The Judge's final decision ended up in favor of the Federal Reserve
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