DENVER—The Fourth Corner Credit Union may soon become the first financial institution to serve the marijuana industry.
The Denver Post reported that the Colorado Division of Financial Services late Wednesday issued Fourth Corner CU an unconditional charter to operate.
Next steps are for the credit union to obtain insurance from NCUA and a master account from the Federal Reserve System.
If all goes well, the CU could open its doors Jan. 1.
Gov. John Hickenlooper's office called the charter "the end of the line" for the state's efforts to solve the marijuana industry's nagging problem: obtaining banking services.
In May, state lawmakers passed a bill to establish cannabis credit co-operatives, a financial services co-operative to serve licensed marijuana dispensaries in the state.
The co-ops are not CUs, and interest in the entities has been limited, explained Chris Myklebust, Colorado commissioner of financial services, this summer.
Though NCUA insurance is not guaranteed — sale and consumption of marijuana remains illegal under federal law — Fourth Corner can operate until NCUA makes its decision.
"A Colorado law of 1981 allows a credit union to open its doors while an application for share-deposit insurance is pending," attorney Mark Mason, one of Fourth Corner's key organizers, told the Denver Post. The NCUA review could take up to two years, Mason said.
The Fourth Corner received a banking routing transit number from the American Bankers Association in July, after the state gave its charter conditional approval. With the final charter issued, the master account should soon follow.
Federal regulators are sure to key in on the credit union's business plan, insurance and a fidelity bond, as well as its focus on safety and soundness, Mason told the publication.
"The cornerstone is the compliance department, with a world-renowned anti-money-laundering expert and former regulators helping to write the first manual of its kind in how to handle marijuana money," Mason said. "That was critical."
Fourth Corner will be open to any legal marijuana enterprise in Colorado, as well as anyone who is a member of a nonprofit that supports legalized cannabis, according to attorney Douglas Friednash, who incorporated the credit union shortly after the charter was approved, the Denver Post reported.
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