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The Kansas City Federal Reserve Bank and NCUA were sued in federal district court Thursday by Fourth Corner Credit Union, a state-chartered credit union in Denver that was formed last November to serve legitimate marijuana businesses.

Reports note the credit union was denied federal share insurance by NCUA last year and that the Fed bank, citing that, has also denied the credit union's request for a master account number. That account number would allow the credit union to take debit and credit card payments and handle electronic fund transfers. Fourth Corner has asked the court to overturn those decisions.

Legislation introduced by Sen. Jeff Merkley, D-Ore., and included in Senate appropriations legislation would bar federal regulators from prohibiting, penalizing or discouraging a financial institution from providing financial services to a legitimate, state-sanctioned and regulated marijuana business. Rep. Ed Perlmutter, D-Colo., pushed related legislation during the 113th Congress and offered it anew this year as H.R. 2076.

The only guidance for financial institutions on working with these businesses – which are legal only in some states, not at the federal level – is from the Financial Crimes Enforcement Network. That guidance reminds that marijuana businesses are legal only at the state level and details several suspicious activity report requirements for financial institutions serving them.

While FinCEN's guidance was meant to mitigate the dangers associated with conducting an all-cash business, NAFCU noted at the time that it did not address the legal issue of whether an institution is violating federal law in providing services to a marijuana business.