A Colorado credit union aiming to serve cannabis businesses won a partial victory Thursday when a court ruled the Federal Reserve Bank of Kansas City cannot block access to a special account the firm needs to do business.
The decision is a symbolic triumph for Fourth Corner Credit Union but won’t allow the firm to serve the marijuana industry.
In a 2-1 decision, the 10th U.S. Circuit Court of Appeals in Denver ruled that Fourth Corner can serve supporters of MJ legalization – but not licensed cannabis or hemp businesses – as long as the Controlled Substances Act is intact.
Following the court’s decision, however, Fourth Corner can now proceed with plans to secure a so-called master account with the Kansas City Fed.
Lending institutions can’t function without such an account, which gives them access to the nation’s banking system.
Thursday’s decision came after a U.S. district judge last year threw out Fourth Corner’s suit against the Kansas City Fed; the company appealed.
The two appeals court judges writing in favor of Fourth Corner said the lower court judge overstepped his authority by denying the credit union access to a master account.
In a statement, Fourth Corner called Thursday’s decision “historic” for two reasons.
“First, it firmly establishes that all chartered financial institutions are allowed access to the nation’s payment system without discrimination,” the credit union said. “Secondly, while the ruling did not go so far as to legitimize banking for marijuana-related businesses, it honors the structure and framework under which (Fourth Corner) was chartered.”