The Fourth Corner Credit Union (TFCCU), a credit union chartered in Colorado to serve the banking needs of those who support “the social movement that supports the legalization effort based upon a belief in personal liberty, state’s rights and wellness” as well as marijuana and hemp-related businesses (MRB). It is this latter category, which are now legal either as medical dispensaries or part of the recreational industry in twenty-three (23) states and the District of Columbia, that have caused both the Federal Reserve Bank of Kansas City (FRB-KC) and the National Credit Union Administration to deny TFCCU access to necessary systems in order to function. The manufacture, sale, or distribution of marijuana as well as aiding and abetting in these activities remain illegal under federal law.
On July 30, 2015, TFCCU filed a declaratory judgment action against FRB-KC. The credit union is banking on a federal judge providing an expedited decision that if decided in TFCCU’s favor could give MRBs a strong solution to the muddled system currently in place. FRB-KC’s laid out its primary defenses yesterday when it filed a motion to dismiss the complaint. FRB-KC argues that TFCCU’s complaint cannot stand on the grounds of illegality; federal preemption; and, a contrary interpretation of the key banking laws on which TFCCU relies.
Miller Nash Graham & Dunn is following this case and other developments in banking, insurance, and finance in the cannabis industry and we will post additional information on this case as it becomes available.