High Finance

Fourth Corner Credit Union application conflicts with federal law

A federal district court decision in Colorado could carve out a clearer path for marijuana-related business financing, a sticky subject for the industry that kept entities in a holding pattern of operating primarily cash-run businesses.

Fourth Corner Credit Union formed in 2014 to service marijuana-related businesses. A complaint Fourth Corner brought against the Federal Reserve Bank of Kansas City in federal district court in September alleges that FRB-KC’s requests for additional documentation to form a master account were discriminatory because of the nature of the business its members are involved with.

Fourth Corner revised its plan so that now, its membership is expected to consist of marijuana-related advocacy organizations, social groups and nonprofits rather than marijuana-related businesses themselves.

The lawsuit currently in federal district court alleges that after Fourth Corner amended its membership plan, FRB-KC still required the credit union to submit a business plan as well as information about share deposit insurance and projected capital funding, items that are “not part of the standard master account documents.”

To read this story and other complete articles featured in the December 11, 2017 print edition of Law Week Colorado, copies are available for purchase online.