(January 8, 2016) The banking prejudice haunting legitimate cannabis business owners is now squarely in the hands of the U.S. Congress. On Tuesday, the Federal Reserve in Kansas City (“Reserve”) denied Fourth Corner Credit Union’s (“Fourth Corner”) application for a master account for electronic transfer of funds to access the U.S. banking system. The Reserve is a private corporation created by an Act of congress. Fourth Corner was chartered in Colorado in 2014 as credit union, but is still precluded from taking deposits or issue credit. U.S. District Judge Jackson dismissed the appeal citing cannabis prohibition under federal law.
This did not come as a surprise. At oral argument on December 28, 2015 on Fourth Corner’s motion for summary judgment and the Reserve’s motion to dismiss, the Judge stated that, “I would be forcing the reserve bank to give a master account to a credit union that serves illegal businesses”. Generally granting either motion would be a final disposition of the case in that parties favor, although the Judge has wide latitude to shape an order that can dismiss all or some claims.
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