DENVER (1/4/16)--As the lawsuit filed by Fourth Corner CU against the Federal Reserve Bank of Kansas City continues, Judge R. Brooke Jackson is likely to rule against the credit union hoping to serve legal marijuana businesses, according to a report in Forbes. Per the report, Jackson said he was sympathetic to Fourth Corner, but as a judge he must uphold the laws and marijuana remains illegal at the federal level.
Fourth Corner CU was approved for a state charter by the Colorado Division of Financial Services in November 2014 to serve the needs of legal marijuana-related businesses. It needed then only to receive insurance from the National Credit Union Administration (NCUA) and a master account from the Federal Reserve system.
Both were denied in July 2015, and in August Fourth Corner announced it would sue both agencies.
Fourth Corner has argued that it is being discriminated against because its clients are in the marijuana industry, while the Kansas Fed claims that serving those business would cause it to break federal law.
According to Forbes, Jackson suggested the two parties attempt to work out an agreement.
Fourth Corner gave a presentation at the Credit Union National Association/National Association of State Credit Union Supervisors Bank Secrecy Act conference in November, outlining their business model and the challenges that come with attempting to serve such businesses.
The U.S. Treasury’s Financial Crimes Enforcement Network issued guidance for financial institutions serving legal marijuana-based businesses in February 2014, and in August 2014 estimated that approximately 105 financial institutions are serving those businesses.
In July 2014, the NCUA stated that it has issued the FinCEN guidance to agency examiners who are responsible for determining compliance of financial institutions serving marijuana-related businesses.