A Colorado credit union dedicated to serving the cannabis industry is one step closer to becoming fully operational. On Feb. 5, 2018, the Fourth Corner Credit Union was given conditional approval by the Federal Reserve Bank of Kansas City for a master account.
The decision to grant conditional approval is the culmination of years of effort on behalf of Fourth Corner Credit Union, both in and out of the courtroom. In 2015, the credit union sued the Federal Reserve after the institution denied Fourth Corner a master account. Although the case was dismissed, Fourth Corner has continued to lobby the Federal Reserve for approval.
In the letter granting Fourth Corner conditional approval, federal officials insist that its decision does not reflect the policy views of the Federal Reserve and that its decision should not be misconstrued as providing regulatory guidance or precedence.
As part of its conditional approval, Fourth Corner will not be able to do work with businesses directly related to the cannabis industry, such as dispensaries, but the credit union will be able to serve ancillary businesses, such as cannabis-related law firms.
While Fourth Corner’s conditional approval brings it one step closer to becoming fully operational, there are still more hurdles in its path. Fourth Corner must now seek deposit insurance from the National Credit Union Administration, which has previously denied the credit union, or a private insurer.
Speaking with the Wall Street Journal, Fourth Corner founder Mark Mason said that the credit union’s approval could signal a shift on the part of financial regulators.
“It’s been the mission of the Fourth Corner Credit Union to bring about fully legal banking to the marijuana industry,” said Mason. “As a matter of public safety and good monetary policy, the billions of dollars being generated by the state [legalized] businesses need to be in banks.”