Court ruling means continued uncertainty for pot banking

The legal lunacy surrounding a state chartered Colorado credit union formed to provide banking services to marijuana businesses took another bizarre turn Tuesday, which is great news for lawyers and bloggers, but lousy news for credit unions looking for definitive guidance in states where it is legal.

When I last wrote about The Fourth Corner Credit Union in Colorado, it had sued both the NCUA, which had denied it share insurance, and the Federal Reserve Bank of Kansas City,  which had denied it a “master account” needed to access the  federal reserve system.  A federal district court ruled that these actions were entirely appropriate. The district court explained that forcing the Federal Reserve bank to provide the CU services would be forcing the bank to “facilitate criminal activity.” The CU appealed.

On Tuesday a three judge panel of the Court of Appeals for the 10thcircuit  ruled on the credit union’s appeal,  THE FOURTH CORNER CREDIT UNION, a Colorado state-chartered credit union, Plaintiff – Appellant, v. FEDERAL RESERVE BANK OF KANSAS CITY, Defendant – Appellee.., No. 16-1016, 2017 WL 2766364, at *1 (10th Cir. June 27, 2017).

continue reading »

More News