“Historic” ruling

Weed credit union will apply for account with Federal Reserve Bank

After being on the favorable end of a “historic” ruling in federal court, a Denver marijuana credit union will again apply for a master account with the Federal Reserve Bank of Kansas City, the credit union’s CEO said Thursday.

Fourth Corner Credit Union formed in 2014 — the same year legal recreational marijuana sales began — to provide services to a marijuana industry struggling to bank by traditional means because of conflicting federal and state laws. The credit union landed a state charter, but was denied a master account by the regional bank for the Federal Reserve System.

That denial was upheld in a January 2016 district court ruling, which dismissed Fourth Corner’s case with prejudice. Fourth Corner appealed that decision.

Earlier this week, a three-judge panel for the 10th U.S. Circuit Court of Appeals vacated that lower court’s ruling and remanded the case with instructions to dismiss the amended complaint without prejudice. The ruling leaves Fourth Corner free to pursue another master account and provides a legal fallback in case that bid is quashed.

“We believe that this is historic,” Fourth Corner CEO Deirdra O’Gorman said.

The ruling establishes that the Federal Reserve Bank of Kansas City does not have the discretion to deny issuance of a master account as long as the applicant meets its standards, she said. It also frees Fourth Corner to pursue its business plan serving the burgeoning marijuana industry.

The Kansas City Fed declined to comment on the decision and does not comment on individual applications, spokesman Bill Medley said.