Pot industry’s bank bid rejected by federal regulators

Although Marijuana businesses are legal in Colorado but they do not have much option when it comes to the banking system and have to rely much on cash transactions because pot business is considered illegal under the federal law.

While a few 400 banks offer a few services for the cannabis industry, generally they do so at more expensive rates than credit unions.

Two lawsuits recently filed in Denver seek to overturn decisions made by the Federal Reserve and the National Credit Union Administration, disallowing the marijuana-centric Forth Corner Credit Union from operating.

The Fed denied Fourth Corner’s request to allow it to operate within the banking system.

And this is the more reason the credit union is asking for equal access to the financial system so that marijuana businesses could operate without restrictions, because they are now at a disadvantage.

Fourth Corner was created specifically to serve the pot industry.

“We will continue to push the federal government to allow banking for this industry”, said Colorado Gov. John Hickenlooper in his State of the State address in January.

Critics say this is a public safety issue, because it places a target on the backs of marijuana businesses by forcing them to keep large amounts of cash in their stores. However approximately after receiving the letter from the NCUA, they received a denial from the Federal Reserve.

The federal government still prohibits the use of marijuana, even though many states have taken steps to legalize recreational and medical marijuana.