Pubdate: Mon, 28 Dec 2015
Source: Albuquerque Journal (NM)
Copyright: 2015 the Associated Press
Contact:  http://www.abqjournal.com/
Details: http://www.mapinc.org/media/10

LEGAL POT BUSINESSES SEEK ACCESS TO BANKS

DENVER (AP) - 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 those 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-intensive nature of the pot industry leaves 
many in the business feeling nervous. Many Colorado marijuana 
businesses hire 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 Department of the Treasury, 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, and 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 this morning.
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MAP posted-by: Jay Bergstrom