A Denver-based credit union is suing the Federal Reserve over a rejection disallowing the credit union from handling money generated by the state’s legal marijuana industry, reported Yahoo News. The federal government has remained unreasonably cautious about legal marijuana money being held in financial institutions.
The Fourth Corner Credit Union (FCCU) in Denver submitted an application to the Federal Reserve requesting that it be allowed to open a “master account” for Colorado’s legal marijuana businesses. The Federal Reserve rejected the application, prompting the lawsuit. The suit argues that the Fed is stifling the marijuana industry’s “equal access” to the financial sector. The credit union’s founders believe that the Fed was “looking for reasons” to deny the application.
“I felt all along like they were trying to figure out a way to deny our application,” said South Carolina attorney Mark Mason, who co-founded the FCCU. “[A] federal judge who is only concerned in applying the law can [now] make a decision.”
Since Colorado and Washington became the first states to legalize marijuana for recreational use, there has been a hang up in the industry. Financial institutions don’t want to give legal marijuana businesses access to bank accounts. Marijuana is still illegal under Federal law, which categorizes it as a Schedule I drug, meaning it serves no medical purpose. The categorization has banks nervous about servicing legal marijuana businesses.
Under the impression that it was an issue with the banks, Mason and others started the FCCU in order to exclusively service the legal marijuana industry, which is currently cash-only. Being cash-only makes these businesses a prime target for theft. However, not even the Federal Reserve is willing to give legal marijuana businesses a fair shot at being 100 percent legitimate.
Archaic drug laws and outdated perspectives about marijuana are hurting the industry’s progress. As marijuana is being cultivated and harvested for medical and recreational use, the Fed’s actions perpetuate the negative image associated with marijuana legalization.
