A Denver-based credit union hoping to become the first to serve the Colorado cannabis industry was denied an application for a ‘master account’ by the Federal Reserve Bank. Without such an account, the credit union cannot do business.
Approval of the Fourth Corner Credit Union’s application would have allowed Colorado’s marijuana industry to stop relying on cash transactions. Banks have refused to allow marijuana businesses to open accounts because the industry remains illegal at the federal level.
Critics have alleged that cash transactions make the industry vulnerable to fraud and other malpractices.
The Federal Reserve’s Kansas City branch had been reviewing the credit union’s application since November, and finally denied it earlier this month. Mark Mason, an attorney representing the credit union, stated that Fourth Corner has filed a lawsuit in response:
“The Fourth Corner Credit Union (TFCCU) sued the Federal Reserve Bank of Kansas City and the National Credit Union Administration in federal court in Denver to get a fair and impartial hearing on its request for a master account… TFCCU looks forward to having this matter ruled upon by a federal judge.”
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