Federal banking official to meet with Colorado pot industry workers, congressmen

A federal banking official took the unprecedented step Thursday of meeting with marijuana business owners, as the pot business awaits word on setting up its own bank.

Kansas City Federal Reserve President Esther George held a closed-door meeting with about 20 representatives of the marijuana industry.

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The meeting was arranged by two Colorado congressmen who have tried unsuccessfully to pass laws expanding banking access for the marijuana industry, Democratic Reps. Ed Perlmutter and Jared Polis.

Federal authorities have released guidelines to banks about how to accept pot-related clients, but most banks have declined.

Banks routinely reject pot businesses for even basic services such as checking accounts because they fear running afoul of federal law, which considers marijuana and its proceeds illegal.

Colorado awarded a license last year to a credit union to serve the industry. But the Fourth Corner Credit Union can't start taking deposits without clearance from the Federal Reserve. The application has been on hold in the Kansas City office, and pot workers planned to urge George to approve the application.

The marijuana industry currently relies on a hodge-podge of banking work-arounds, from changing accounts frequently using innocuous-sounding names to hiring armed guards to ferry truckloads of cash.

"My concern is that somebody's going to get killed before change is made," said Charles Smith, chief operating officer for Denver-based Dixie Brands Inc., which makes marijuana-infused sodas and candies.

The Federal Reserve declined a request from The Associated Press to attend the meeting. Colorado Open Meetings Law requires access to meetings with two or more public officials discussing topics of public interest, but the requirement does not extend to federal officials including members of Congress.

In a statement, the Federal Reserve spokesman didn't say where Fourth Corner's application stood or why George was meeting with marijuana business owners.

"The Federal Reserve Bank of Kansas City has a role in ensuring the financial system's safety and soundness in the state of Colorado and to gather information from local businesses and community leaders," spokesman Bill Medley said in an email.


Kristen Wyatt can be reached at http://www.twitter.com/APkristenwyatt