One Denver-area credit union is learning how to deal with rejection amid a haze of rules about how financial institutions can interact with businesses which legally sell marijuana.
This past Thursday, the Federal Reserve rejected Fourth Corner Credit Union’s application for a “master account,” the New York Times reported.
Were the account approved, the story said, it would have opened up opportunities for the credit union to work with other financial institutions to provide financial help to marijuana dealers in the pot-legal state of Colorado.
The reasoning behind the decision, the Times wrote, is that while individual states may have legalized marijuana, the sale and use of the drug is still not legal at the federal level. Therefore, the story said, federal concessions to requests like the one from Fourth Corner are few and far between.
Fourth Quarter executive Mark Mason was quoted by the NY Times as saying that he wasn’t too surprised about the rejection letter, noting that he was pretty sure the Fed was trying to find a reason to “deny our application.”
I felt all along like they were trying to figure out a way to deny our application (…) a federal judge who is only concerned in applying the law can make the decision.
According to a report on the Denver Post, the credit union was specifically set up to handle money from the pot industry; money, the story said, which is difficult to process because of “onerous” Department of Treasury guidelines.
But many large banks considered the guidelines onerous and still won’t take deposits related to marijuana businesses, prompting Colorado banking regulators to set up a proposed credit union to comply with those guidelines.
In response to the denial, the credit union has launched a pair of lawsuits against the Federal Reserve, the report indicated.
According to the Denver Post, the Fed’s rejection is the latest denial in a string of roadblocks which included the National Credit Union Administration’s denial of Fourth Corner’s application for deposit insurance.