A credit union in Colorado has won a partial victory in federal court that will allow the bank to serve cannabis advocacy groups, but not companies that deal directly with cannabis. Fourth Corner Credit Union was denied a master account by the Federal Reserve Bank of Kansas City over their desire to serve canna-businesses. This master account gives a bank access to the nation's banking system, and a bank cannot operate without it.
The federal prohibition of marijuana prevents any bank from dealing with any company that handles funds related to cannabis. Organizations like advocacy groups that focus on cannabis but do not personally handle the drug have generally been free to create accounts with banks. But after recent threats of a federal crackdown on legal marijuana, even advocacy groups have found their accounts in question. The Marijuana Policy Project, for example, recently had their accounts closed by PNC Bank.
Fourth Corner sued the Kansas City Fed over the denial, but a district judge threw out the case last year. The credit union appealed, and this week the 10th U.S. Circuit Court of Appeals ruled that the bank should be granted its master account. The credit union will not be allowed to serve businesses that directly handle cannabis, but will be able to offer accounts to legalization advocates.
Fourth Corner called the court's decision “historic” for two reasons. “First, it firmly establishes that all chartered financial institutions are allowed access to the nation’s payment system without discrimination. Secondly, while the ruling did not go so far as to legitimize banking for marijuana-related businesses, it honors the structure and framework under which 4CCU was chartered.”