U.S. Sen. Michael Bennet has hopped into the fray over whether a newly formed pot-only credit union should receive a Federal Reserve System bank account critical to its operation.
In a carefully worded letter last week to Federal Reserve board chair Janet Yellen and Esther George, president of the Federal Reserve Bank in Kansas City, Bennet urged them to move ahead with Fourth Corner Credit Union’s 4-month-old application for a master account.
“I understand the need for the Federal Reserve to ascertain the potential risks that the credit union may pose and the steps needed to mitigate such risk,” Bennet wrote. “I also appreciate the independent review that you must undertake before issuing a master account.”
Requesting the Fed work with Fourth Corner in any areas it thinks merit additional attention, the letter stops short of demanding a decision in a process that, according to the master account application, ordinarily takes five-to-seven business days.
“…it is my hope that (the Fed) will work directly with the credit union to the extent it has not satisfied the necessary terms and conditions to open a master account,” Bennet wrote.
The Federal Reserve does not comment about banking operations or applications that are in process.
The long delay has been frustrating for Fourth Corner’s organizers, particularly since months went into creating a business plan that dealt with any number of federal questions about dealing with risk.
“We’ve assembled all these people who for a year have worked on this 150-page manual vetted by all the professionals, for the proper model of handling all the rules and guidance the government has said was required,” said Mark Mason, an attorney who has been working to launch the credit union. “We’ve done it.”
Fourth Corner was formed to cater specifically to the marijuana industry, valued at $3 billion nationwide, which has had difficulty obtaining banking services and keeping accounts once they are open.
Although Forth Corner has a Colorado charter to operate, it cannot formally open its doors until it has the master account, which in part hinges on deposit insurance by the Nation Credit Union Administration, which is also pending.
Mason said it’s possible the delay is merely the Fed being very cautious before allowing the marijuana trade access to the nation’s banking system. Marijuana remains illegal under federal law.
“I think they’re trying to be careful with it rather than just tabling it and waiting for it to go away,” Mason said. “This movement won’t go away.”
It’s even unclear where the application sits, although it was filed with the Kansas City branch of the Federal Reserve, which handles Colorado.
Some Fed watchers said the decision to allow a marijuana-only financial institution access to the nation’s money system is too big for a branch to make, that it would likely come from the Fed’s seven-member board in Washington, D.C.
David Migoya: 303-954-1506, email@example.com or twitter.com/davidmigoya