Colorado's attempt to create a bank to service its cannabis industry has received a setback from the Federal Reserve.
The guardian of the U.S. banking system said in a court filing Wednesday that it doesn't intend to accept a penny connected to the sale of cannabis because it remains illegal under federal law.
The filing came in a legal battle between the Federal Reserve and a would-be credit union backed by the state of Colorado that would serve the industry.
Last year, the U.S. Treasury Department issued rules for how banks can accept cannabis money. But the Federal Reserve now says cannabis proceeds can't go into the banking system.
The would-be Fourth Corner Credit Union was set up last year to serve Colorado's $700 million-a-year cannabis industry. But it can't open without clearance from the Federal Reserve.
- DENVER (AP)