Agnes: Let’s keep banking prosperity local
Editor’s note: In 2019, Elevations Credit Union attempted to purchase the assets of Cache Bank & Trust in Greeley in what would have been the first acquisition of a bank by a credit union in Colorado, but the deal was blocked by the Colorado Banking Board. This guest opinion advocates a change in state law to permit these transactions.
The state Legislature is considering a recommendation from Colorado’s Department of Regulatory Agencies under the leadership of Gov. Jared Polis and DORA’s executive director, Patty Salazar, to clarify text within the Colorado Banking Code to permit banks to sell their assets to credit unions. On Feb. 28, this recommendation was introduced to the legislature as Colorado House Bill 1351.
The recommendation makes good business sense, has the potential to greatly benefit Colorado consumers and businesses and removes an unnecessary barrier in the Colorado financial services marketplace. It is worth noting that banks are already allowed to sell their assets to credit unions in 46 other states.
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As we’ve seen over the past decade, most banks that are sold nationally are sold to other banks. But it’s important to note that nearly 70% of those assets were sold to an out-of-state bank. In contrast, only 0.6% of bank assets were sold to credit unions. Similarly, in Colorado 39 banks have been sold to other banks since 2012. Now, 78% of those assets are headquartered out-of-state.
Exporting jobs, capital, and future financial support from local communities to other states is not good business for Coloradans. During the past decade, banks in Colorado have closed 16% of their branches, while credit unions have expanded their branch locations by 8%.
This recommendation does not mandate that banks sell their assets to credit unions. Rather, it simply provides another alternative should a bank decide to sell to a credit union. And the great news is that credit unions, which are not-for-profit financial cooperatives, are owned by their members and structured to exist in perpetuity, and they will locally retain the jobs, capital, and future financial support that otherwise would likely be exported to other states.
I strongly support the thoughtfully proposed recommendation by DORA to explicitly clarify that Colorado banks have the same opportunities as those in 46 other states to sell their assets to credit unions. I urge our state legislators to vote “yes” on HB 1351 to improve the future of Colorado.
Gerry Agnes is president and CEO of Elevations Credit Union with operations in Boulder and Larimer counties.
