The Fourth Corner Credit Union in Colorado has appealed a federal judge’s decision to dismiss a lawsuit the upstart financial institution had filed in an effort to provide financial services to cannabis companies.
U.S. District Judge R. Brooke Jackson in January threw out Fourth Corner’s suit seeking a so-called master account with the Federal Reserve Bank of Kansas City. Lending institutions can’t function without such an account.
In his ruling, Jackson said that granting access to the Federal Reserve’s network would “facilitate criminal activity” because marijuana remains illegal under federal law. The ruling dealt a setback to the marijuana industry’s hope for a solution to its banking woes.
Fourth Corner filed its appeal on Friday with the 10th U.S. Circuit Court of Appeals in Denver, the Denver Post reported.
Colorado regulators awarded Fourth Corner a credit union charter in November 2014. But in July 2015 the Kansas City Fed denied Fourth Corner’s request for access to the master account. Fourth Corner filed suit soon afterward.
As of March, 301 banks and credit unions had marijuana-related accounts as of March, up from 51 in March 2014.