Colorado Pot Banking Case Tests Federal Drug Rules

(Photo: CPR/Irvin Coffee)
<p>An array of marijuana plants in a Boulder grow. </p>

Posted 9:22 a.m. | Updated 1:10 p.m.

Should pot sellers be able to use the nation's banking system as long as marijuana is an illegal drug? It's a question before a federal judge Monday as a Colorado-chartered bank attempts to force the U.S. Federal Reserve to let those pot shops access the nation's banking system.

The case involves Fourth Corner Credit Union, which Colorado set up last year to serve the marijuana industry. Though federal banking regulators have issued guidelines to other banks to accept money from pot sales, banks frequently say those guidelines are unwieldy. That leaves many pot shops stuck trying to pay bills and taxes in cash.

Attorneys for The Fourth Corner Credit Union argued that the Federal Reserve is usurping the sovereignty of the State of Colorado which issued the bank’s charter.

The Federal Reserve's attorneys bcountered that they denied the bank because marijuana is against federal law and the credit union was unable to get deposit insurance.

Thus far, the judge has mentioned several times that marijuana is clearly against federal law. He also implored the sides to negotiate some kind of settlement.