Fourth Corner Credit Union: A Marijuana-related Business Struggles to Open Its Door

This critical incident describes a federal regulatory battle faced by Fourth Corner Credit Union. Located in Denver, Colorado, Fourth Corner wanted to be the first Colorado credit union created to serve the growing recreational marijuana industry. Although marijuana remained an illegal drug at the federal government level, Colorado had approved marijuana for recreational use within the state. Fourth Corner Credit Union successfully applied for and received a state credit union charter (i.e., permission) from Colorado in 2013, but was unsuccessful in securing a Master Account from the U.S. Federal Reserve. Without a Master Account, the credit union could not obtain insurance from the National Credit Union Association, leaving its prospective depositors unprotected from financial losses and unable to transfer funds or complete settlements. Thus, the doors to Fourth Corner remained closed. Given the setback, students are asked to decide which course of action Deirdra O’Gorman, the credit union’s CEO, should recommend at next week’s board meeting.