A newly-created credit union in Colorado filed a suit againstthe NCUA and the Federal Reserve Bank of Kansas City – an actionthat might domino into a state law versus federal law showdown.

In a media release, The Fourth Corner Credit Union said it isthe first state chartered credit union designed to providefinancial services to the cannabis and hemp industries. TFCCU'smotto, according to its website, is “Growing a more perfect union.”That union may not be easy to come by, however, since TFCCU cannotopen until it is granted a master account – something it was deniedin July.

In the release, TFCCU said it filed the lawsuit last week as alast resort, and that the credit union simply wants a fair andimpartial hearing. Currently, marijuana businesses operating instates where the drug is legal in some form, are operating in cash-only environments. Many say that in additionto hurting their ability to apply for business loans, the largeamounts of cash in circulation creates a public safety issue.

Ryan Donovan, CUNA's chief advocacy officer, said that althoughCUNA has no position on the issue of marijuana and whether itshould be legal, the trade association does want to ensure creditunions are able to serve their neighbors. He also wants to ensurethat any legislation that comes from the federal level in responseto financial institutions that cannot assist certain businesseswith banking needs is written appropriately.

He said previous attempts were made in Congress to allowfinancial institutions to handle the banking needs of businesseseven if the business itself was illegal, and that there were “acouple definitions of credit union” in the language of thosebills.

“We want to make sure they use the proper one,” he said.

Donovan said there hasn't been much appetite in Congressrecently to address the issue of federal law blocking credit unions from handling the bankingneeds of cannabis business in states that have legalizedmarijuana.

“But I think that as more states move to legalize recreationalmarijuana, I think the pressure will be on Congress to make sure itis done safely,” Donovan said.

In the meantime, a lawsuit may be the only way for TFCCU to openits doors.

TFCCU applied for a master account in November. In July, TFCCUreceived a notification from the NCUA that it was not eligible forinsurance. Shortly after, the Federal Reserve Bank of Kansas Cityalso denied TFCUU a Master Account. The NCUA told CU Timesit cannot comment on pending litigation.

Read more on marijuana business banking issues in the Aug.12, 2015 print issue of CU Times.