The Federal Reserve Bank of Kansas City finds itself in the middle of a heated debate about the legalization of marijuana, as the target of a lawsuit filed by a credit union seeking to serve the industry.
The Kansas City Fed denied Fourth Corner Credit Union — a state-chartered credit union founded in Colorado in 2014 — a nine-digit routing transit number to create its master account. Because the credit union can’t operate without that routing number, it filed suit Thursday in federal court.
In denying the credit union’s application, the Federal Reserve argued that it can’t clearly identify the risk posed by the financial institution or how to manage that risk.
Fourth Corner CEO Diedra O’Gorman said the Kansas City Fed is engaging in unreasonable restraint of trade and commerce. She said that once the credit union received a state charter, federal law requires that access to the Federal Reserve payment systems must be granted. The suit also argues that the Federal Reserve doesn’t have jurisdiction over Fourth Corner Credit Union because the Colorado Division of Financial Services is the institution’s banking regulator of record. [Read more at the Kansas City Business Journal]