After its denial to open a master account earlier this year, Fourth Corner Credit Union sued the Federal Reserve. Today, federal judge R. Brooke Jackson heard arguments in Colorado. Unfortunately, it looks as though the the credit union wasn’t able to persuade the judge.
Jackson took the request by the credit union to order the federal reserve to grant the master account under advisement and said he would issue a written decision.
His comments indicated, however, that he was leaning toward declining to issue the injunction.
“I would be forcing the reserve bank to give a master account to an illegal business,” Jackson said.
Lawyer Robert McVey of the Canna Law Group predicts that FCCU has little chance of winning:
Though we are rooting for Fourth Corner to prevail, it would be a major upset if Fourth Corner were to win. At its heart, the case is about one thing: does the Federal Reserve have discretion as to whom it issues master accounts, or does it have to issue master accounts to any financial institution that receives state or federal charters?
The big takeaway from this case so far that federal agencies continue to throw up road blocks that will not go until marijuana ceases to be a Schedule 1 controlled substance. That said, credit unions that already have master accounts and already have deposit insurance have a much, much easier time offering services to marijuana businesses than do new institutions like Fourth Corner.
Read Kirk Mitchell’s “Federal judge hears arguments on marijuana banking”: http://www.denverpost.com/news/ci_29318232/federal-judge-hears-arguments-marijuana-banking
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