DENVER—A Federal Reserve Bank has given conditional approval to Fourth Corner Credit Union to serve marijuana-related businesses, although as part of the deal the CU has agreed to step back from its original plan to serve state-licensed dispensaries.
As CUToday.info has reported, Fourth Corner has been seeking for some time to serve the state’s cannabis-related businesses, and although it was granted a state charter, NCUA has declined to approve it for federal deposit insurance. The credit union’s founders filed suit against the Fed over that issue three years ago.
In June of 2017, a three-judge panel for the 10th U.S. Circuit Court of Appeals vacated a district court ruling that nixed the CU’s bid to receive a master account with the Federal Reserve Bank of Kansas City. Additional details on Fourth Corner’s suit can be found here.
As part of a new agreement, Fourth Corner Credit Union will focus on individuals and companies that support legalized marijuana, including those who partner with vendors, such as accountants, lawyers and landlords, according to the Wall Street Journal.
In a letter, the Federal Reserve Bank of Kansas City said, “this letter does not express the policy views of” the Fed, “nor does it contain any supervisory, regulatory or enforcement guidance or precedent,” according to the Journal. The Federal Reserve Bank’s statement comes not long after the Trump administration has moved to toughen its position on marijuana.
The Journal quoted several marijuana-industry advocates as saying they are skeptical the settlement with the Federal Reserve Bank would advance the sector, since the credit union was barred from serving it directly.
“It’s not a clear win for marijuana banking, in my opinion,” Steven Kemmerling, an analyst at MRB Monitor, which compiles data on the marijuana industry, told the Wall Street Journal. “Most people believe that federal laws are going to change, (but) who knows when that will be?”