Pubdate: Sat, 20 Feb 2016
Source: Denver Post (CO)
Copyright: 2016 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Mark Goldfogel
Note: Mark Goldfogel is executive vice president of industry 
relations for The Fourth Corner Credit Union.
Referenced: http://www.mapinc.org/drugnews/v16/n030/a06.html

LEADERSHIP NEEDED ON POT BANKING ISSUE

"Congress must act on pot banking," Jan. 16 editorial.

Last month, U.S. District Judge R. Brooke Jackson dismissed a lawsuit 
seeking federal approval for the first credit union for marijuana in 
Colorado, saying that allowing it "would facilitate criminal activity."

It's time The Fourth Corner Credit Union (TFCCU) publicly responds to 
Judge Jackson's ruling in favor of the Federal Reserve Bank of Kansas City.

TFCCU's request was for equal access to the payment system - a master 
account - which any other financial institution enjoys. It was never 
TFCCU's intent to deal with marijuana-related businesses exclusively. 
Our charter includes appropriate (legal) marijuana businesses as well 
as ancillary businesses and individuals that have a common interest 
in hemp and cannabis.

Integral to TFCCU's argument is the fact that a financial institution 
can be state or federally chartered. The Federal Reserve Bank's 
directive from the Monetary Control Act of 1980 demands that it 
provide non-discriminatory access to the payment system. It cannot 
deny access to an institution where a state has chartered a financial 
institution to conduct business within that state.

Judge Jackson's ruling held that the Federal Reserve Bank's mandate 
to provide access to the nation's payment system did not include 
financial institutions directly serving the cannabis industry because 
cannabis remains federally illegal. The judge did not address the 
question of whether the Federal Reserve Bank has supremacy over the 
State of Colorado in choosing financial institutions. Neither did the 
judge invalidate TFCCU's charter, the first of its kind issued by the 
state of Colorado in over a decade. Rather, the judge ruled that he 
could not compel the Reserve Bank to grant the TFCCU a master account.

Judge Jackson said that he must take his guidance from Congress, and 
that the directives issued by the Financial Crimes Enforcement 
Network and the Justice Department on Feb. 14, 2014, and before do 
not provide enough clarity. He called these memos a "nothing burger." 
That same guidance is relied upon by many financial institutions 
across the country that work with the industry.

This may be a "nothing burger" to the judge, but it's currently 
guiding a multibillion-dollar industry.

Nobody actually wants this industry to remain unbanked. Most 
thoughtful people recognize the safety challenge the government has 
created by forcing the marijuana industry to deal primarily in cash. 
But leadership is needed to solve this problem before lives are lost.
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MAP posted-by: Jay Bergstrom