As states individually regain some of the freedom lost through decades of cannabis prohibition, one of the many roadblocks to a thriving legal market has been finding a reliable banking solution. Now, one credit union in Colorado may be on the brink of a breakthrough, after having received a conditional approval from a Federal Reserve Bank to deal with marijuana-related businesses — with some limits.
To obtain the green-light from the Federal Reserve Bank of Kansas City to serve clientele generating revenue from cannabis businesses, Fourth Corner Credit Union had to make some concessions. While Fourth Corner will be able to provide banking services to ancillary services in the industry, such as marijuana lawyers and landlords who rent their properties to cannabis businesses, the feds refused to issue their approval if dispensaries (even state-licensed ones) would be among Fourth Corner’s client list.
“It’s been the mission of the Fourth Corner Credit Union to bring about fully legal banking to the marijuana industry,” said Mark Mason, co-founder of the revolutionary credit union. “There are many ancillary businesses that have trouble getting bank accounts because they do business with marijuana.”
Even though it is not a fully encompassing solution for all businesses in the industry, it’s baby steps toward an ultimate goal that will cease to keep business owners and consumers in harm’s way, considering the constant threats of theft and violence that target cash-centric operations.
Fourth Corner sued the Federal Reserve Bank three years ago over their refusal to accept what is a legal industry in Colorado, so the agreement by both parties is a monumental step that should lay the groundwork for other banking institutions around the nation to follow suit.
The Federal Reserve Bank of Kansas City issued a letter to Fourth Corner detailing their approval, while also tempering any thoughts that this was an approval of marijuana itself by a Federal entity, saying, “this letter does not express the policy views of” the Fed, “nor does it contain any supervisory, regulatory or enforcement guidance or precedent.”
The conditional approval comes at a time when the climate for cannabis reform at the federal level is cloudy, with Jeff Sessions just last month promising that our U.S. Attorneys would again be granted permission to prosecute marijuana offenders, even in states where they have legal protection.
Because cannabis is still prohibited under federal law, banks and credit card companies that are federally-insured are afraid to risk their status by conducting business with cannabis-related companies.
But where do the top money minds in America’s federal government actually stand on the issue?
On Tuesday, Treasury Secretary Steve Mnuchin was testifying before the House Financial Services Committee when the topic of marijuana banking came up.
“I assure you that we don’t want bags of cash,” Mnuchin said in response to a query about the negative consequences of shutting cannabis businesses out of banking institutions. “We want to make sure that we can collect our necessary taxes and other things.”
Cover image courtesy of Allie Beckett