Pubdate: Mon, 28 Dec 2015
Source: Honolulu Star-Advertiser (HI)
Copyright: 2015 Star Advertiser
Contact: 
http://www.staradvertiser.com/info/Star-Advertiser_Letter_to_the_Editor.html
Website: http://www.staradvertiser.com/
Details: http://www.mapinc.org/media/5154

CREDIT UNION TRIES TO PUT POT CASH IN BANKING SYSTEM

DENVER - A marijuana banking case set for arguments today is testing 
the federal government's stated goal of addressing the cash-only 
nature of the quasi-legal pot industry.

But should pot sellers be able to use the nation's banking system as 
long as marijuana is an illegal drug? It's a question before a 
federal judge trying to weigh a Colorado-chartered bank's attempt to 
force the U.S. Federal Reserve to let pot shops access the nation's 
banking system.

The case involves Fourth Corner Credit Union, which Colorado set up 
last year to serve the marijuana industry.

Federal banking regulators have issued guidelines for how banks can 
accept money from pot sales, but banks frequently say those 
guidelines are unwieldy. That leaves many pot shops stuck trying to 
pay bills and taxes in cash.

No major marijuana-related cash heists have been reported in 
Colorado, but the cash-intense nature of the pot industry leaves many 
in the business feeling nervous about operating in cash. Many 
Colorado pot businesses use armed security.

"The public is at risk in having hundreds of millions of dollars of 
cash flowing about the streets of Colorado," the credit union argued 
in a court filing last summer.

Fourth Corner aimed to solve the dilemma by catering to 
marijuana-related businesses, filing all the reports federal 
regulators say should be required of the pot industry. Because 
marijuana remains illegal under federal law, those who handle 
proceeds from pot sales could be implicated in a federal racketeering 
case if they don't follow the guidelines.

But the U.S Federal Reserve, a private entity that nonetheless acts 
as the government's fiscal agent, is standing in Fourth Corner's way. 
The Federal Reserve says that despite guidance about pot banking from 
the Treasury Department, pot money simply can't be allowed into the 
nation's central banking system as long as the drug remains illegal 
under federal law.

The credit union "was formed with the intent to serve a federally 
illegal purpose," the regional Federal Reserve argued in one of its 
court filings.

The Federal Reserve also argued that Congress, not a federal judge, 
must decide whether pot money can join the nation's banking system.

U.S. District Judge R. Brooke Jackson hears arguments in the case 
today. He has no deadline for making a decision.
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MAP posted-by: Jay Bergstrom