Colorado pot bank sues the Federal Reserve System

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.

The Federal Reserve earlier this month rejected the application from The Fourth Corner Credit Union in Denver, because it intends to provide banking services to state-licensed marijuana businesses.

In a July letter responding to Fourth Corner’s application to service the pot industry, the National Credit Union Administration stated that the cannabis industry “does not have an established track record of success and remains illegal at the federal level”. It got state approval back in November, and was waiting for a green light from the Federal Reserve.

“In spite of all of these obstacles and impediments, the industry is really working hard to gain some traction and we just want to be their partner and help them with that goal”, O’Gorman said. It has a broad support base including from groups of business owners, legalization advocates and attorneys.

The Governor of Colorado John Hickenlooper said the state would continue to push the federal government to permit banking for the marijuana industry.

The industry needs to work in all cash, which has created an entirely new industry of security firms that cater to the dispensaries. Therefore, the story said, federal concessions to requests like the one from Fourth Corner are few and far between.

The Kansas City branch of the Federal Reserve declined comment.

The case could force the courts to resolve the conflict between state and federal laws. Other political and business leaders have expressed that Coloradoans are not getting the full benefits such a growing industry should yield in terms of jobs due to the lack of capital available for loans.