The fate of a highly anticipated Credit Union created to serve the Colorado marijuana industry–the Fourth Corner Credit Union–appears to lie in the hands of the board of governors for the Federal Reserve System in Washington, D.C., according to an article in The Denver Post. The Federal Reserve "typically does not involve itself with local issues handled by the nation's 12 regional reserve banks," states the report, but banking experts suggest that considering marijuana's illegal federal status, the issue is too large to be handled without federal involvement.
The Federal Reserve Bank of Kansas City usually would handle requests for "critical master accounts" in Colorado, people familiar with the process told The Post.
A representative from the Colorado Bankers Association told The Post that the Federal review of the Credit Union's application is "not surprising," as the decision would have national ramifications.
According to Fourth Corner's website, it is "The only credit union in the world constructed from the ground up to serve the interests of the legalized cannabis industry and its supporters." It would accept members' cash deposits and enable electronic transfers and bill payment–a process marijuana businesses have, for the most part, been unable to access, as banks have been reticent to provide services to businesses dealing in a product that, while legalized at a state level, still is illegal on a federal level.
Colorado's banking regulators said "they're respecting their state's laws by approving Fourth Corner," reported USA Today, and granted it a charter on Nov. 19, 2014.
"I'm a pro state's rights guy, and in Colorado we have legalized," Chris Myklebust, the Colorado commissioner of financial services, told USA Today. "When I pull a $20 bill out of my pocket, and look at the front, it says it's legal tender for all debts public and private. Legal businesses in a state should be able to use the currency of the nation."
After the Credit Union was given a state charter, many anticipated it would be essentially ready to get up and running, despite the need to be assigned a master account from the Federal Reserve for access to the country's electronic banking system.
USA Today had reported in December 2014 that, "The credit union believes that it will get the account number without a fight because the Federal Reserve must give out numbers to organizations that have been granted state charters"; but according to the newly released article from The Denver Post, in the hands of the Federal Reserve is "precisely where we assumed it would end up," attorney Mark Mason, who is among those behind the creation of Fourth Corner, told The Denver Post.
All hope may not be lost, according to one banking structure consultant interviewed for The Post's report, but the Feds could also dish out a "no" by simply not responding to the request, or, in other words, "letting it sit."
