Credit Union Pitches Fed On Pot Payments Solution

Denver-based, state-chartered Fourth Corner Credit Union has asked the Federal Reserve Bank of Kansas City for a master account to help social groups pushing for the legalization of marijuana. According to a report in CUInsights, the master account would enable the credit union (CU) to serve such social groups.

In a civil complaint filed at the end of September, Fourth Corner Credit Union argued the federal law “unambiguously creates a non-discretionary statutory obligation” requiring the Federal Reserve Bank of Kansas City to issue a master account to all depository institutions. The lawsuit also contends the Federal Reserve Bank of Kansas City has invoked an “illegal discriminatory procedure” by asking the CU for information that the government agency doesn’t obtain from any other depository institution seeking a master account. 

Fourth Corner Credit Union has requested that a Denver federal judge order the Fed to issue the master account immediately, noted the CUInsights report.

The credit unit first applied for the master account back in November of 2014 after receiving a state charter to serve the legalized recreational pot industry in the state of Colorado. It has since changed its target market and is now serving social groups pushing for marijuana legalization. Fourth Corner Credit Union noted it won’t serve marijuana businesses in Colorado until the federal law changes, giving traditional financial firms the authority to serve the pot market.

At a time when the Fourth Corner Credit Union is fighting to serve social groups supporting marijuana, Hawaii is planning to be the first state to offer cashless cannabis sales to avoid robberies and other crimes targeting marijuana dispensaries. According to a recent Bloomberg news report, the governor’s office said all Hawaii’s eight licensed dispensaries have agreed to go cashless by Oct. 1. The dispensaries will ask patients to use a mobile payment app called CanPay, which is already available for marijuana sales in six states, including California and Colorado.

The Hawaii dispensaries are setting up accounts with the Safe Harbor Private Banking credit union, according to CUInsights. Customers can use their checking accounts to pay with CanPay, then send the payment to Safe Harbor. Patients who don’t own smartphones can still create CanPay accounts with an email address and personal identification number, then buy marijuana by logging onto their accounts with computer tablets at the dispensaries.