DENVER (11/24/14)--The Colorado Division of Financial Services (CDFS) approved an unconditional state charter for The Fourth Corner CU this week, setting the stage for the establishment of the first-ever credit union that will serve the marijuana industry (Denver Post Nov. 20).
With the charter in hand--the first issued by the CDFS in nearly a decade--the only hurdles left in Fourth Corner's way are to obtain insurance from the National Credit Union Administration, and to receive a master account from the Federal Reserve System.
While the NCUA review could take up to two years, according to Mark Mason, one of the marijuana credit union's key organizers, the credit union may begin operations starting Jan. 1, as Colorado law permits credit unions to open their doors while an application for share-deposit insurance is pending.
The credit union would serve all marijuana-related businesses, such as growers and transportation companies that support the industry, and also those legal enterprises that sell it at retail shops.
The Mountain West Credit Union Association (MWCUA) has been monitoring the development of the state's first marijuana-industry credit union, and plans to stay apprised as the process with the NCUA and federal regulators unfolds.
"Ever since Amendment 64, legalizing the recreational use of marijuana in Colorado, was passed and went into effect, we have been monitoring the challenge of providing financial services to businesses in this industry," said MWCUA President/CEO Scott Earl in a statement to News Now. "While this first-of-its-kind charter would serve legal marijuana businesses in Colorado, it will be some time before we know if the credit union has approval from the NCUA for deposit insurance."
Mason said federal regulators will likely pay special attention to the credit union's business plan, the insurance and a fidelity bond, and its safety and soundness.
"We are building a whole new structure to deal with an industry that still violates federal law," Douglas Friednash, who incorporated the credit union soon after the charter was approved, told the Denver Post. Federal law enforcement and bank regulators can still punish the industry, and until that gets resolved, it will continue to have a cloud over it, he said.