When I look at The Fourth Corner Credit Union’s website, I get sad. It asks if I am “Interested in becoming a Member?” and do I “Want to join our team?”
I am interested in becoming a member. I do want to join their team.
But I can’t do either of these things.
See, The Fourth Corner wants to be “THE FIRST OF ITS KIND,” “The only credit union in the world constructed from the ground up to serve the interests of the legalized cannabis and hemp industries and their supporters,” but they’re “Not Currently Open For Business.”
The web page cites a number of news stories; one from a November, 2014 Denver Post article which claims “Colorado pot credit union could be open by Jan. 1  under state charter.” Another Post story from that same week – more than a year-and-a-half ago – quotes Gov. Hickenloper calling TFCCU “the end of the line” for the complications between the state’s cannabis businesses, a group responsible for generating nearly $700 million during that calendar year according to the state’s Department of Revenue, and the federal government’s banking system, which bans these folks as potential customers. These cannabis businesses have continued to work diligently, generating nearly a billion dollars last year, paying state taxes, paying federal taxes.
Gov. Hickenloper’s optimism was misplaced. July, 2015 saw the denial of TFCCU’s application for deposit insurance by the National Credit Union Administration. That same month, its application for a Master Account by the Federal Reserve Bank of Kansas City, necessary for access to electronic banking, was also denied.
The Fourth Corner responded by filing suit against both organizations. Arguments were heard in U.S. District Court by Judge R. Brooke Jackson on Dec. 28, 2015. Judge Jackson returned his decision on Jan. 5, 2016, rejecting the suit on the grounds that marijuana remains illegal under federal law.
Judge Jackson’s decision refers to 2014 guidance documents issued by the Department of Justice which, he writes, “suggest that prosecutors and bank regulators might ‘look the other way’ if financial institutions don’t mind violating the law,” but ultimately states that he, as a federal judge has no such luxury. His decision closes by saying that he “regard[s] the situation as untenable and hope[s] that it will soon be addressed and resolved by Congress.”
So, where, exactly, do we now stand with regard to cannabis-based businesses and banking?
As long as marijuana continues to be classified as a Schedule I drug under the Controlled Substances Act, these businesses are, technically, criminal enterprises in the eyes of the U.S. Federal Government and any revenue generated by them is seen as the product of criminal activity and not fit for their banks.
Then there’s reality. Every cannabis-related business that has an ATM does so in violation of federal law, but those machines aren’t going anywhere. More and more weed shops across the state are accepting credit cards. Media reports put the percentage of cannabis businesses with bank accounts between 30 and 40 percent. Any bank that does business with a state with a recreational or medical program in which taxes are collected is doing so in violation of federal law. These things are not likely to stop. Banks are in the business of money. Cannabis generates money. Forward thinkers like the people involved in The Four Corners Credit Union are establishing infrastructure that, with only eight states currently having no recreational, medical, or CBD-specific programs, will be ready when the federal government decides to remove the last few roadblocks. That will be a day to smile.
Christopher Gallagher lives with his wife and their four dogs and two horses. Life is pretty darn good. Contact him at email@example.com