Pub. 9 2019-2020 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2020 3 Call me at 320.759.8401 Based in Alexandria, Minn., serving Minnesota Commercial & ag participation loans Bank stock & ownership loans Bank building financing Business & personal loans for bankers As your partner, we share your values. You’ll find the community banking service, integrity and trust you’re used to. Why choose Bell as your bank’s lending partner? Jeff Restad Together, let ’s make it happen. Member FDIC 21097 We do not reparticipate any loans. 21097 AD Colorado Bankers Association 2019 Update_Jeff_V2.indd 1 3/11/19 3:43 PM outpaced that of credit unions in all categories studied. Whether or not bankers object to the proposal, or the fact that customers are happier with banks’ service, the proposed acquisition may be against Colorado law. In the early 1980s, CBA assisted in the passage of Colorado statute 11-103- 709, which governs the sale of all, or substantially all, of the assets of a bank. In short, the statute provides that a bank can sell all or most of its assets to another bank (emphasis added), mentioning no other purchaser. It appears a bank may only sell to another bank. CBA wrote the Division of Banking asking about this and it is seeking a legal opinion from the Attorney General. If memory serves me, the law was enacted to protect customers of a state bank from losing consumer protections when their deposit or loan business was sold to a nonbanking entity that didn’t have the same protections. The state sought to insulate these customers’ funds from risk. Further, Colorado statute 11-30- 104 emphasizes that state-chartered credit unions (including Elevations) may “purchase all or any portion of the assets of another credit union and assume the liabilities of the selling credit union and its field of membership.” As of yet, CBA has been unable to locate any reference to a credit union that would be authorized to purchase assets or assume the liabilities of any non-credit union entity, including banks. The Division of Banking is in the process of determining the impact of those statutes but isn’t likely to take action on the proposed acquisition as a complete application has not been submitted. For the sale to take place, regulatory approval is required by both bank and credit union statutes. CBA will keep its members apprised of any progress on the proposal and potential legal challenges. Themini-trend in the U.S. of credit unions buying banks flusters many in banking. We completely support a free market, but not when statutory restrictions are violated. The limitations in Colorado statutes are there for a reason. We look forward to the Attorney General’s opinion and action from the regulators if the application is completed and filed. n We completely support a free market, but not when statutory restrictions are violated. The limitations in Colorado statutes are there for a reason.