Colorado’s efforts to develop a financial institution to work with the marijuana industry, which has suffered another setback by the federal government and could be facing an impossible dilemma. The Federal Reserve — the protector of the U.S. banking system — stated in a court filing Wednesday that it does not intend to accept a penny connected to the sale of marijuana because marijuana is still illegal under federal law. The stance appears to mark a shift in the position of the federal government. And we still are left with confusion.”
The filing came in a legal battle between the Federal Reserve and the would-be Fourth Corner Credit Union, which was created this past year to serve Colorado’s $700 million-a-year pot industry.
The credit union can not open without clearance from the Federal Reserve, which said in its filing that “transporting or transmitting funds known to have derived from the distribution of marijuana is illegal.”
Colorado-chartered the Fourth Corner Credit Union after the Treasury Department issued its guidance this past year on marijuana banking. Which was a no go.
Currently, the credit union wants a federal judge to step in and order the Federal Reserve to switch its mind.
”It’s a phenomenal question about executive action,” stated Peter Conti-Brown, a lawyer and banking historian at the University of Pennsylvania who is keeping tabs on the case.
On one hand, the Federal Reserve is putting themselves in the way of the stated goal of the Treasury Department to “enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.” However by allowing marijuana industry money to associate with money from other national commerce, the Federal Reserve would be removing one of the last barriers to marijuana acceptance.
The federal government could barely claim to consider marijuana illegal if its own banking system allows money from the marijuana industry in the national banking system.
The Federal Reserve released in their most current filing that bankers will not be led away in handcuffs for taking money made through legal marijuana sales, yet they do not have the right to put that money in the Federal Reserve system.
By working for approval from the Fed, it was “as if Colorado enacted a scheme to allow trade in endangered species or trade with North Korea,” the filing states.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
