The Fed's attorneys said the tenderfoot bankers were denied a master account because of too little upfront capital. But the judge said he was unimpressed with the argument, according to the LA Times report.
With a decision expected in the days ahead, a ruling could set the tone as other states with legal weed wrangle thorny regulatory challenges, sources told the LA Times.
A Kansas City Fed spokesman declined to comment on the case.
"Honestly, after hearing the arguments yesterday in court, I still find myself uncertain as to the reasoning behind our denial,” Deirdra O’Gorman, president and CEO of Fourth Corner told CNBC in an email. "My sincere hope is that Congress will act soon, so that these legal businesses can have access to banking services. Not only do these legal businesses deserve a financial institution that will work to help them accomplish their financial goals, but access to banking will help solve this important public safety issue. The more funds we can funnel away from illegal operations into legitimate areas, like funding for schools or tax revenue for states, we can help to positively change our communities."
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