Credit Unions: The Perfect Charter for Cannabis Banking

Credit unions trace their roots to humble beginnings in 19th century Europe. Franz Hermann Schulze-Delitzsch, a lawyer, established the first credit unions in the 1850s in Germany to give those lacking access to financial services the opportunity to borrow from the savings pooled by themselves and their fellow members. Friedrich Wilhelm Raiffeisen transported the financial cooperative concept to rural Germany a decade later. The movement eventually spread to North America, where credit unions established themselves in Canada and the United States. The credit union movement in the United States included pioneers such as Edward Filene, Roy Bergengren, Louise McCarren Herring and Dora Maxwell, all of whom fought hard against big banks and government bureaucracy to bring financial services to those in need.

From the beginning, the credit union mission has been to provide banking to unserved populations, who historically had to seek out risky and expensive loans from hard money lenders or to rely on the generosity of friends and family. It is from this rich history that the founding members of The Fourth Corner Credit Union chose to apply for a credit union charter as the means of providing reliable, compliant and transparent banking services to the legalized cannabis industry and to supporters of this social movement, which is deeply grounded in the spirit of personal liberty.

Like the legalized cannabis industry, credit unions have been shut out of the mainstream banking industry and have had to innovate to find solutions when it seemed as though the system was doing everything in its power to keep them out. A major wall to access for credit unions came tumbling down with the Monetary Control Act of 1980, which states that a Reserve Bank shall provide all depository institutions equal access to the federal payments system on non-discriminatory terms. This statute provided credit unions with the same access to the nationwide payments system that had been afforded to banks via the Federal Reserve System for decades.