A Colorado credit union — once on the cusp of revolutionizing banking for marijuana businesses before being thwarted by the Federal Reserve Bank of Kansas City — has resumed its quest to open.
But going into the new year, The Fourth Corner Credit Union — a state-chartered credit union in Denver — again finds itself in a courtroom battle with the Kansas City Fed for the ability to open and serve marijuana businesses.
This time, the credit union is approaching the challenge with a new strategy — a scaled-back mandate to serve only advocacy groups rather than its previous, broader ambition to serve plant-touching businesses.
Whether the plan will work remains to be seen.
The outcome of the U.S. District Court case — no date has been set — could have important implications for the availability of banking to state-legal marijuana businesses.
The issues, said Steve Fox, director of VS Strategies, the consulting arm of Vicente Sederberg law firm, are “. trying to address a serious public safety issue” and “. businesses having the right to operate safely and freely.”
Only a small number of banks serve the marijuana industry, so most cannabis companies must conduct their transactions in cash, thereby making them more vulnerable to robberies than traditional businesses with banking access.
Fourth Corner’s conflict arose in November 2014, when the credit union received its Colorado state banking charter and then applied for a master account with the Kansas City Federal Reserve.
Then, in July 2015, the Kansas City Fed denied Fourth Corner’s request for a master account. Such accounts are crucial because they connect banks and credit unions to the nation’s financial system.
Fourth Corner responded with a lawsuit, which a District Court dismissed in January 2016. Fourth Corner appealed that ruling, and in June 2017,