Pubdate: Sat, 30 Apr 2016
Source: Denver Post (CO)
Copyright: 2016 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Alicia Wallace

STUCK AT CROSSROADS

Fourth Corner Forges on in Bid to Be State's First Credit Union for Pot

The Fourth Corner Credit Union on Friday appealed a lower court's 
ruling that denied its bid to become the first Colorado credit union 
for the marijuana industry.

U.S. District Judge R. Brooke Jackson in January dismissed Fourth 
Corner's suit seeking a master account with the Federal Reserve Bank 
of Kansas City. Jackson said granting access to the Federal Reserve's 
network would "facilitate criminal activity" because marijuana 
remains illegal under federal law.

"We don't believe that the courts can rule on the potential of 
breaking a law before any crime has been committed," said Mark 
Goldfogel, Fourth Corner's executive vice president of industry relations.

Fourth Corner's brief was filed in the 10th U.S. Circuit Court of Appeals.

Other banks and financial institutions already are serving the 
marijuana industry under guidance issued by the Department of the 
Treasury Financial Crimes Enforcement Network, the credit union noted.

"It's incredibly hypocritical for the Justice Department and the 
Financial Crimes Enforcement Network to issue guidelines on how to do 
something while not allowing those industries who wish to follow 
those guidelines the ability to do so without the fear of 
prosecution," Goldfogel said.

Fourth Corner received a state credit union charter in November 2014 
but was refused a master account by the Federal Reserve.

"We have created a system that allows billions of dollars to flow 
unsecured in the industry because our government bureaucracy moves 
slowly," Goldfogel said. "And that scares me."

The Federal Reserve's policy is to not comment on pending litigation, 
said Scott S. Barker, a Wheeler Trigg O'Donnell attorney representing 
the U.S. banking system.

The Colorado Bankers Association declined to comment on the specifics 
of the litigation. "As far as we are concerned, nothing has changed," 
spokeswoman Amanda Averch said. "It remains illegal under federal 
law, and the Controlled Substances Act is very clear."

As the case against the Federal Reserve progressed, it became 
apparent that the lower court's decision would not be the final 
determination, Goldfogel said.

"We knew that probably this was going to be a somewhat protracted 
court battle, whether we won or lost the first round," he said.

But Goldfogel said legal rulings made in the months since the January 
ruling give the credit union an advantage heading into the second round:

In February, a Colorado District Court judge ruled partly in favor of 
Green Earth Wellness, a Colorado Springs marijuana business that was 
seeking insurance coverage for plants damaged during the Waldo Canyon fire.

In March, the U.S. Supreme Court declined to hear Nebraska and 
Oklahoma's lawsuit challenging Colorado's marijuana legalization.

In April, the 9th U.S. Circuit Court of Appeals threw out the Justice 
Department's case that barred the operation of the Marin Alliance for 
Medical Marijuana in California.

"That really is, at its core, the same question: Does a cannabis-or 
marijuana-related business have rights to normal business protections 
and legal protections?" Goldfogel said, adding that courts previously 
shied away from ruling in these matters. "And that's changing 
literally right in front of us."
- ---
MAP posted-by: Jay Bergstrom