DENVER–A federal judge has dismissed a lawsuit filed by a credit union founded to serve the marijuana industry that sought to force the Federal Reserve to issue it a master account number that would have allowed it to process electronic payments.
In a nine-page decision, Judge R. Brooke Jackson dismissed the lawsuit by The Fourth Corner Credit Union, saying marijuana remains illegal under federal law and that if the CU got what it was seeking it would “facilitate criminal behavior.”
The decision came even though the Department of Justice has published guidance on how banks can work with legal marijuana businesses and indicating it would not pursue criminal investigation of any financial institution following those guidelines. But Jackson disagreed.
"These guidance documents simply suggest that prosecutors and bank regulators might 'look the other way' if financial institutions don't mind violating the law," Jackson wrote. "A federal court cannot look the other way." Jackson added that while prosecutors might "apply certain priorities in making enforcement actions…it does not change the law."
The Fourth Corner Credit Union had filed suit against the Federal Reserve Bank of Kansas City in November of 2015 to force the Fed to provide it with a master account. The Fed had earlier rejected the application.
Several credit unions are already serving the pot industry in several states. Approved for a state charter in Colorado, The Fourth Corner CU was founded to serve the cash-intensive marijuana-related businesses. All of the cash continues to present safety and security issues for those businesses and their employees.
The Fourth Corner Credit Union has a separate lawsuit in federal court in which it is seeking to have NCUA approve it for federal deposit insurance. NCUA had earlier rejected that request, and has also asked the court to dismiss that lawsuit.
For his part, Judge Jackson sees only one remedy.
"I regard the situation as untenable and hope that it will soon be addressed and resolved by Congress," the judge wrote.
A full report on the credit union and its objectives can be found here.