A lawsuit seeking federal approval for a credit union specifically designed to serve the cannabis industry was dismissed on Tuesday.
According to The Denver Post, U.S. District Judge R. Brooke Jackson dismissed The Fourth Corner Credit Union’s lawsuit against the Federal Reserve because it “would facilitate criminal activity.” According to Jackson, the case cannot move forward because cannabis remains illegal under federal law.
The credit union was already approved for a bank routing number by the state of Colorado, but its application for a master account with the Federal Reserve was promptly blocked by the federal institution.
Fourth Corner’s argument is that — according to banking guidance documents issued by the federal government in February, 2014 — the federal government has been technically allowing banks to work with marijuana businesses who are operating 100% legally under state law.
Jackson, however, understands the federal government’s slight banking allowances in a different light. “These guidance documents simply suggest that prosecutors and bank regulators might ‘look the other way’ if financial institutions don’t mind violating the law,” the judge wrote in a 9-page opinion on the subject. “A federal court cannot look the other way.”
Fourth Corner has been working for years now to solve the cannabis industry’s most pressing limitation: access to reliable banking services. Though this lawsuit didn’t pan out, it was the closest anyone has come to securing bank services for the industry.
However, Jackson did admit that the credit union had presented a convincing argument, but that it was nonetheless impossible to issue a ruling that defied federal drug laws. “I regard the situation as untenable and hope that it will soon be addressed and resolved by Congress,” he wrote.
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