DENVER-The Federal Reserve has told Fourth Corner Credit Union—chartered to serve this state’s marijuana industry—that it has not been approved for a “master account” that is needed to launch its operations. In response, the credit union has filed suit against the Fed.
Fourth Corner Credit Union has been granted a charter to operate by state regulators, but it has been delayed in opening its doors as it waited on the master account to be granted as well as federal deposit insurance to be approved.
The New York Times reported that the credit union said the Federal Reserve’s branch in Kansas City had informed it on Thursday that it had not been approved for the master account, which means it could not process payments, among other things. The Times said Fourth Corner filed suit in federal court demanding “equal access” to the financial system.
The Times quoted Mark Mason, the South Carolina-based attorney representing Fourth Corner, as saying, “I felt all along like they were trying to figure out a way to deny our application. (Now) a federal judge who is only concerned in applying the law can make the decision.”
While marijuana has been legalized under state law in Colorado, it remains illegal under federal law, which has led to numerous legal issues and other challenges for both financial institutions and marijuana businesses in the state, which have been forced to deal in cash only, creating safety concerns.