Colorado credit union sues Federal Reserve Bank

The Fourth Corner Credit Union asked a Colorado federal judge last month to force the Federal Reserve Bank of Kansas City to issue a master account that would enable the Denver-based state chartered credit union to serve social groups that support legalizing marijuana.

The credit union’s civil complaint filed Sept. 29 in U.S. District Court in Denver argues federal law “unambiguously creates a non-discretionary statutory obligation” that requires FRB-KC issue a master account to all depository institutions. The lawsuit alleged that FRB-KC has “invoked an illegal discriminatory procedure” by requesting information from the credit union that the FRB-KC is not entitled to receive from any depository institution that applies for a master account. The credit union is asking a federal judge in Denver to render a declaratory judgment and grant a mandatory injunction that would order the federal reserve bank to immediately issue the master account.

TFCCU initially applied for a master account with FRB-KC in November 2014 after it received a state charter to serve the legalized recreational marijuana industry in Colorado. However, the credit union has since changed its business plan to serve social groups supporting the legalization of marijuana. The credit union also said it would not serve marijuana-related businesses in the state until there is a change in federal law that would authorize financial institutions to serve the pot industry.

 

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