A Denver credit union seeking court action that would enable it to represent legal cannabis businesses has had its case thrown out by a federal judge.
U.S. District Judge R. Brooke Jackson dismissed the case brought by Fourth Corner Credit Union against the U.S. Federal Reserve Bank of Kansas City, the territory of which includes Colorado.
“The courts cannot use equitable powers to issue an order that would facilitate criminal activity,”
said Jackson in the ruling.
The Fourth Corner Credit Union was established with the express purpose of serving business in the cannabis industry. Although the credit union was granted a charter in Colorado, the Federal Reserve branch had initially denied the credit union’s request for a master account, the account that would enable the credit union to deal with other banks, which triggered the credit union’s court action.
Arguing for Fourth Corner, South Carolina-based attorney Mark Mason argued that the Federal Reserve did not have to authority to regulate an already-running financial institution. The judge, however, wrote that the Federal Reserve was not obligated to allow a master account to an institution that would violate federal law.
The National Cannabis Industry Association, a trade organization dealing specifically with issues relating to cannabis, cited the judge’s ruling as proof that the matter must now be dealt with by Congress.
“There’s no shortcut, there’s no Band-Aid, there’s no work-around to fix this industry-wide,”
said Aaron Smith, the National Cannabis Industry Association’s Executive Director.