Pubdate: Tue, 10 Mar 2015
Source: Denver Post (CO)
Copyright: 2015 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: David Migoya

SEN. BENNET URGES FED TO MOVE ON POT BANK CASE

Marijuana Credit Union's Application for Federal Account Stalled for Months

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 Fourth 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 National 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, and that it would likely come from the Fed's 
seven-member board in Washington, D.C.
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MAP posted-by: Jay Bergstrom