Federal Reserve Says it Won’t Allow Cannabis Banking

The U.S. Federal Reserve said in a court filing this week that it will not accept money made from the sale of cannabis because the plant is still considered an illegal drug under federal law.

The filing also asks a judge to dismiss a lawsuit against the agency brought on by a startup credit union hoping to serve marijuana businesses.

The move is another blow to Colorado’s efforts to create a bank for its burgeoning marijuana sector and other attempts elsewhere to provide financial services to the industry.

The filing is the latest salvo in a battle between the Federal Reserve and the Fourth Corner Credit Union, which is hoping to serve Colorado’s $700 million marijuana industry.

Fourth Corner applied with the Federal Reserve for a master account – which it needs to begin working with marijuana businesses – but that request was denied. The credit union then filed a lawsuit asking a federal judge to overturn the Federal Reserve’s decision.

The Federal Reserve’s stance on banking seems to contradict guidance issued last year by the U.S. Treasury Department, which said its goal is to “enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.”

The judge overseeing the case has not yet revealed when he will take it up, according to an Associated Press report.

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7 comments on “Federal Reserve Says it Won’t Allow Cannabis Banking
  1. Troy McRoberts on

    The hypocrisy of the Federal Reserve is unbelievable. They won’t accept money that comes from cannabis sales from businesses but they have no problem accepting the tax revenue it generates for States. If they won’t accept it for one group then they shouldn’t be accepting from States.

    • Chris on

      It’s not hypocrisy. It’s a cold, calculcuated strategy on a larger scale to support other big money industries from losing profits, i.e. Pharma, for profit prison industries. I also believe tobacco and alcohol are behind it as well.

    • Rick Fague on

      No, they’re just being consistent since it is still illegal at the federal level. They don’t get any state tax revenue, either.

      What I think the industry needs to do is pool our resources and create a strategy for making the fed change MJs classification. We need to be the proverbial squeaky wheel, make a lot more noise, maybe toss a couple of lawsuits the governments way, some more petitions, contact our elected representatives, and use the system we have to enact change.

      This is the federal government we’re talking about, they will not change MJs classification until we use the political system we’ve set up to make political changes happen. Hoping for change is a start but actual work is what will make it happen.

  2. Jennifer Dominguez on

    If the Federal Reserve would have allowed it, then it would have easily persuaded the Federal Gov’t to change their view, and we would be one step closer to fully legalizing this drug.

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