OVER A CENTURY: BUILDING BETTER BANKS — Helping Coloradans Realize Dreams November/December CHAIRMAN’S MESSAGE THE BANKING INDUSTRY UNDER SIEGE Credit Unions’ Unchecked Expansion
©2024 The Colorado Bankers Association is proud to present Colorado Banker as a benefit of membership in the association. No member dues were used in the publishing of this news magazine. All publishing costs were borne by advertising sales. Purchase of any products or services from paid advertisements within this magazine are the sole responsibility of the consumer. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Colorado Banker or its publisher, The newsLINK Group LLC. Any legal advice should be regarded as general information. It is strongly recommended that one contact an attorney for counsel regarding specific circumstances. Likewise, the appearance of advertisers does not constitute an endorsement of the products or services featured by The newsLINK Group LLC. Jenifer Waller President & CEO Alison Morgan Director of State Government Relations Brandon Knudtson CFO & Director of Membership Lindsay Muniz Director of Education Megan Carruth Executive Assistant Margie Mellenbruch Bookkeeper* Melanie Layton Lobbyist* Garin Vorthmann Lobbyist* Andrew Wood Lobbyist* Caroline Woodhouse Lobbyist* *Outsourced 140 E. 19th Ave., Ste. 400 Denver, Colorado 80203 Office: (303) 825-1575 coloradobankers.org colorado-banker.thenewslinkgroup.org BUILDING BETTER BANKS — Helping Coloradans Realize Dreams 10 21 3 CHAIRMAN’S MESSAGE The Banking Industry Under Siege Credit Unions’ Unchecked Expansion By Kevin Erickson, Chairman, CBA 4 WASHINGTON UPDATE Defend the Dual Banking System By Rob Nichols, President & CEO, ABA 6 1071 Data Collection Tips and Tricks By Paula S. King, CPA, Abrigo 10 The Not‑So-Simple Changes to SIMPLE IRAs By Carrie Horn, CISP, CHSP, QPA, TGPC, SDIP, ERISA Consultant, Ascensus 12 CBA Centerpoint Going Beyond the Desk to Hear the Stories of Colorado Bankers 14 Generational Trends Shaping Growth Goals Is Modernizing Your Legacy Systems Part of the 2025 Strategic Plan? By ADVANTAGE 16 How SBA Lending Fits Into the Future of Banking 18 IN MEMORIAM Donald Lawrence Sturm (1932-2024) 21 Looking at the Big Picture Fair Lending Concerns on Valuations By Jessica D. Lamoreux, JD, Associate General Counsel, Compliance Alliance 2024-2025 Issue 3 Colorado Banker 2
The Banking Industry Under Siege CREDIT UNIONS’ UNCHECKED EXPANSION CHAIRMAN’S MESSAGE T Kevin Erickson Chairman, CBA The financial services landscape is witnessing a shift as tax-exempt credit unions are aggressively acquiring taxpaying community banks. This trend, which has reached unprecedented levels in 2024, poses serious concerns for local economies and fair competition. With both the number of transactions and the value of assets involved soaring, it is not surprising that credit unions plan to introduce legislation in Colorado in 2025 to authorize the purchase of a bank by a credit union. Banks are vital to the financial health of local economies, accounting for around 60% of small business loans under $1 million and 80% of agricultural loans. As credit unions gobble up these essential institutions, they displace key sources of credit, depriving local businesses and farmers of crucial funding. Furthermore, each acquisition expands the portion of the financial sector that is exempt from Community Reinvestment Act (CRA) requirements, which mandate that banks serve low- and moderate-income communities. Credit unions publicly oppose the mere idea of being subject to similar CRA requirement like banks while the director of the Consumer Financial Protection Bureau believes that credit unions should abide by the same CRA rules. What Is Driving the Trend for Credit Unions to Purchase Banks and Why the Push To Change the Laws in Colorado? The primary driver behind this acquisition spree is the outdated federal tax exemption enjoyed by credit unions, a privilege that dates back to 1934. As credit unions expand, the regulatory environment for banks has become increasingly burdensome, contributing to a wave of consolidations. With over 7,000 pages of new regulations added since July 2023, banks find themselves at a disadvantage, hampering their ability to compete against tax-exempt credit unions. The trend also introduces new risks to the stability of the U.S. financial system. The National Credit Union Administration (NCUA) currently lacks the authority to thoroughly examine the cybersecurity practices of third-party service providers used by credit unions. NCUA Chairman Todd Harper has described this regulatory gap as a “blind spot,” raising alarms that credit unions could become the “soft underbelly” of the broader financial system. As credit unions grow larger through acquisitions, their vulnerability to cyber threats increases, posing risks not just to themselves but to the entire financial ecosystem. As CBA pushed back against the credit unions during the 2024 legislative session, Tennessee enacted legislation to prohibit the purchase of a bank by a credit union. The credit union association would want legislators to believe that 46 states allow the purchase of a bank by a credit union. This is blatantly misleading. Most states are, in fact, silent regarding the authorization of credit union-purchasing banks. Seven states, including Colorado, through statute, the courts or regulation, forbid the sale of a bank to a credit union. We have a piecemeal solution to what is a federal problem. As much as we would hope for Congress to step up to address the systemic inequities created by the tax-exempt status and weak regulatory oversight of credit unions, there is little hope for Congressional action. The ABA and bankers continue to call for a credit union accountability hearing after the rampant discrimination was uncovered within Navy Federal Credit Union. There is little appetite in Congress to hold hearings even though credit unions have not been before Congress in decades. As you well know, banks are routinely called before Congress. The surge in credit union acquisitions raises critical questions about the future of banking. If left unchecked, this trend would alter the banking landscape. The essence of banking — a model built on trust, personal relationships and commitment to local development — may be at risk of being lost in the shuffle. We cannot let that happen. Unknowing taxpayers are helping fuel the acquisitions of banks by credit unions that threaten the financial health of local communities and distort fair competition in the banking sector. Our fight continues at the state and federal levels. 3 Colorado Banker
S WASHINGTON UPDATE Defend the Dual Banking System Rob Nichols President and CEO, ABA Since the time of President Lincoln, American consumers have benefited from a dual banking system, made up of both state-chartered institutions and federally chartered national banks. This system — which can trace its roots back to the U.S. Constitution — allows consumers to have more choices. It offers them a robust marketplace of banks of different sizes and business models to meet their needs. And it enables the nation’s more than 750 national banks to operate safely, soundly and efficiently across multiple jurisdictions under the supervision of the OCC, while at the same time allowing state banks to serve their communities with local supervision. But this system, which has served our country well for more than 150 years, is now coming under threat, as lawmakers in both red states and blue states have begun to pass laws that will interfere with national bank operations, violate federal preemption and tread squarely on the OCC’s turf. Just look at the situation currently unfolding in Illinois, with the Interchange Fee Prohibition Act that was signed into law this summer as part of the state’s budget legislation. This misguided law bans banks, credit unions, payments networks and other entities from charging or receiving interchange fees in Illinois on taxes and tips charged as part of a credit or debit card transaction. This law — which will create unprecedented chaos and confusion for consumers and businesses if allowed to take effect — violates multiple federal statutes, including the National Bank Act and the Federal Credit Union Act, and cannot be enforced against national banks, federal savings institutions or state-chartered banks, as well as federally and state-chartered credit unions. It also runs afoul of the Electronic Fund Transfer Act, which directly addresses the permissible amount of interchange fees for debit card transactions and does not carve out taxes and gratuities. This law, a gift to corporate mega‑retailers as part of a last‑minute budget deal, is the first of its kind to pass in the nation. We can’t let it stand and run the risk of other states following, which is why ABA is fighting back. Together, with the Illinois Bankers Association, America’s Credit Unions and the Illinois Credit Union League, we filed a lawsuit challenging the law, and we are seeking a preliminary injunction pausing implementation until the court can rule on the merits of our case. With top outside lawyers assisting us, we have confidence we will prevail in this case, sending a strong message to other states looking to follow Illinois’ lead. We’ve seen a different kind of challenge to the dual banking system in other states. Florida and Tennessee have put in place their own safety and soundness tests, encroaching on the OCC’s federal oversight of national banks. Like ABA, the OCC has taken notice. We’ve been encouraged by comments from Acting Comptroller Michael Hsu, noting that his agency will continue to defend the dual banking system. The acting comptroller pointed out in recent remarks that “increasingly, banks are being asked by states to pick a side in service of performative politics rather than deliberative policy.” This simply shouldn’t be the case, and we will continue to urge the OCC to exercise its authority when states cross the line. Our dual banking system has served Americans well for decades. ABA will continue to push back against efforts to undermine that system, and we’ll keep pressure on regulators to do the same. Email Rob at nichols@aba.com. Colorado Banker 4
A letter from the CEO of a Colorado CDFI bank. We’re a Colorado bank just like you, but CDFI too… No doubt you’ve heard about the new CRA rules soon to take effect. As a CDFI, did you know First Southwest Bank (FSWB) can help you increase your impact as a community bank and achieve your CRA compliance goals? It can be as simple as creating a deposit relationship or generating loan participations with FSWB. And, we created a technology platform, known as HelloBello (hellobelloapp.com), that makes it easy for community banks like yours to connect to FSWB…for low cost, risk-mitigating funding, and resources like technical assistance, grants and education for your clients. First Southwest Bank can help you create impactful investments, restore economic vitality in Colorado’s markets, and achieve your CRA compliance goals. I encourage you to reach out to me to learn more. Please give me a call at 970-422-5054 or send an email kent.curtis@fswb.com. Sincerely, Kent Curtis Chief Executive Officer & President First Southwest Bank kent.curtis@fswb.com 970-422-5054 ALAMOSA | CENTER | CORTEZ | DURANGO | PAGOSA SPRINGS | SAGUACHE Certified CDFI. Member FDIC. EOE. EHL. SBA Preferred Lender.
C 1071 Data Collection TIPS AND TRICKS By Paula S. King, CPA, Abrigo CFPB 1071 Rule Has Significant Requirements The Consumer Financial Protection Bureau’s (CFPB) small business data collection rule, often referred to as the 1071 rule, is set to be the most significant effort of data collection and reporting for financial institutions in nearly 50 years. Banks and credit unions must prepare to meet the rule’s requirements by understanding what data must be collected, when it needs to be collected and how to streamline the process to ensure compliance. This article describes the scope of the CFPB small business lending data regulations and offers practical tips for banks and credit unions to manage their data collection processes efficiently. Understanding the rule and preparing adequately will help your financial institution stay ahead of deadlines and avoid compliance problems. The Scope of Small Business Data Collection The CFPB’s small business data collection rule implements Section 1071 of the Dodd-Frank Act, which directs the bureau to collect certain demographic data from small business lenders. The primary goal of the federal rule is to facilitate fair lending enforcement and identify the credit needs of women- and minority-owned businesses. Under this rule, any entity engaged in lending activities is required to collect and report demographic data during the application process. This includes not just banks and credit unions but also finance companies, online lenders, Community Development Financial Institutions (CDFIs), government lenders and nonprofit lenders. The only lenders excluded from these requirements are those that originated fewer than 100 covered credit transactions in each of the two calendar years preceding their compliance date. Requests for additional credit tied to an existing loan do not count as originations when determining whether an institution is covered. The rule requires that lenders collect and report data for all small business credit applications from any business with $5 million or less in gross annual revenue its preceding fiscal year. Credit transactions covered by the rule include applications or requests for: • Loans. • Lines of credit. • Credit cards. • Merchant cash advances. • Credit products used for agricultural purposes. • Refinancings where existing debt is satisfied and replaced by a new obligation for the same borrower. Compliance Deadlines for 1071 Small Business Lending Data Regulations Lender deadlines for 1071 compliance are initially determined by the volume of small business loans originated in each of the calendar years 2022 and 2023 or in 2023 and 2024. Abrigo has a one-pager summarizing the 1071 data collection and reporting deadlines. Here’s a general overview of when different types of lenders must begin data collection, based upon their origination thresholds: • Lenders that originate at least 2,500 small business loans in each of the years must start collecting data on covered applications by July 18, 2025. • Lenders that originate at least 500 covered loans in each of the years must begin data collection by Jan. 16, 2026. • Lenders that originate at least 100 small business loans in each of the years must collect application data starting Oct. 18, 2026. Colorado Banker 6
To prepare for these deadlines, lenders may begin gathering the otherwise protected demographic information one year before their official collection deadline. This head start can help institutions ensure timely compliance and address any challenges in advance. Key Data Points Under 1071 Small Business Lending Data Regulations Banks, credit unions and other creditors will need to collect more than 20 pieces of data for each application and report this data to the CFPB each year. The data points cover a wide range of details related to the credit transaction, the business’ attributes and demographic data. Some of the key 1071 data points required include: 1. Application date and method (in person, telephone, online, mail). 2. Credit type, including the product type (term loan, line, credit card, etc.), guarantee type (personal, SBA, USDA, etc.) and loan term (in months). 3. Purpose of the credit (e.g., purchase, working capital, construction, etc.). 4. Amount applied for. 5. Action taken on the application (originated, denied, withdrawn, etc.) and date of action. 6. Amount approved or originated. 7. Denial reasons (e.g., business characteristics, cash flow, collateral). 8. Pricing details (interest rate, origination charges, broker fees, initial annual charges, additional cost for merchant cash advances and prepayment penalties). 9. Census tract number. This information should represent the address where loan proceeds will be applied, the address of the applicant’s headquarters or main office, or another address associated with the applicant. 10. Gross annual revenue. Financial institutions may reuse previously collected gross annual revenue figures when the data was collected within the same calendar years as the covered application. 11. NAICS code. 12. Number of workers and time in business. 13. Business ownership status (such as minority, women, LGBTQI+). 14. Number of principal owners and ethnicity, race and sex/gender of principal owners 1-4. This data must be reported based only on information provided by the applicant (i.e., no reporting based on visual observation). Importantly, the CFPB mandates that lender data collection processes shouldn’t discourage applicants from providing their demographic information. Financial institutions will want to make data collection processes as easy as possible for applicants to encourage participation. Tips for Organizing and Streamlining Data Collection Processes Given the scope of effort needed to collect and report data by the CFPB deadlines, some financial institutions are already taking action. In fact, if you are a tier 1 lender and have to comply beginning July 1, 2025, we recommend beginning your testing now to give you at least nine months of testing. For those who may feel overwhelmed by the tasks ahead, the following steps can help organize and streamline the data collection process: 1. Understand the rule and related requirements. Make sure others involved in lending are familiar with the 1071 small business lending data regulations and the specific requirements for CFPB small business data collection. 2. Review existing data collection practices. Identify what data is already being collected and where gaps exist. Some data may be available within the financial institution’s systems, while other data points will need to be obtained from applicants. 3. Assess current systems used for data collection and reporting. Determine whether these can be leveraged for 1071 data collection and whether new or updated systems are needed. 4. Assess the current lending process (i.e., how information is gathered). This assessment likely will require reviewing the institution’s credit culture if certain required data points are missing from the current application process. Technological Solutions for Efficient 1071 Data Collection Automation can play a critical role in streamlining CFPB small business data collection. Software solutions designed for data collection and analysis can help lenders focus on the borrowers and winning deals while ensuring compliance with the 1071 small business lending data regulations. These tools can also make it easier to review and submit the information to the CFPB efficiently. Abrigo’s product team worked with the CFPB throughout the rulemaking process and has built 1071 compliance into its loan origination platform and its small business loan origination software. While ease of data access is important, in general, if the institution doesn’t employ the firewall exception, CFPB prohibits underwriters or any employee responsible for the disposition or “making a determination” on an application from accessing certain demographic data. Abrigo’s software 7 Colorado Banker
integrates 1071 compliance features such as built-in firewalls and user permission controls to help maintain non-biased lending and compliant reporting. Preparing for Regulatory Changes While organizing the data collection process is crucial, it’s also important for financial institutions to take broader steps to prepare for these regulatory changes. These include educating staff, revising policies and procedures, and considering more standardized pricing and fee structures to align with the 1071 small business lending data regulations. 1071 Data Risk Management and Compliance Strategies Compliance with the 1071 small business lending data regulations will require coordination across multiple departments. To mitigate risks associated with non‑compliance, financial institutions should: • Create a formal project plan and timeline for compliance efforts. • Plan for the training of all relevant staff involved in data collectors, reporting and underwriting. • Establish consistent lending processes to promote data accuracy and compliance. • Consider the formality of the current borrower application process and identify any culture changes needed. • Automate processes to reduce manual errors and speed processes. • Develop internal controls, including those that validate and test the data collected. • Track and report exceptions, particularly those related to pricing, fees and loan structures. By understanding the requirements, preparing in advance and leveraging technology, banks and credit unions can navigate the changes with compliance. Some financial institutions will need to formalize their small business loan application process. Others may decide to balance small business relationship lending with a risk-based pricing model to mitigate unintended disparate treatment among lenders and branches. For institutions facing challenges or staff resource constraints, engaging experienced consultants can help. CFPB 1071 consultants can establish reporting and monitoring processes and recommend any needed policy changes. The CFPB’s 1071 small business lending data regulations represent a momentous change in how financial institutions must collect and report data. By understanding the requirements, preparing in advance and leveraging technology, banks and credit unions can navigate the changes with compliance. Start planning now to make sure your institution is ready for a smooth data collection process under the 1071 rule. Colorado Banker 8
| Bank Stock Loans | Loan Participations | ATM/Debit | International Services | | Cash Management | Securities Safekeeping | Merchant Services | 800-873-4722 | NE: 888-467-5544 | www.bbwest.com Where community banks bank Est. 1980 – 40+ years of service to community banks “As a service provider exclusively focused on community banks, Bankers’ Bank of the West is here to help strengthen our clients and the communities they serve.” Across the western states and Great Plains, we’re the place where community banks bank. That’s because we provide the services, technology, and expertise to help you extend your resources, deliver for your customers, and stand out in your market. 5 reasons to partner with us BBW - President and CEO - Bill Mitchell You can unlock efficiencies and cost savings. We can provide sophisticated solutions and economies of scale because we’re powered by hundreds of community banks across our region. Our priorities are aligned with yours. You can expand your capabilities. We’ll never compete for your customers. You can count on prompt, reliable service. • Independent loan review • Loan and credit administration consultation • Strategic planning facilitation • Management, staffing, & succession planning • Acquisition & expansion • BSA/AML compliance • Regulatory risk consultation President, Jim Swanson President, Anne Benigsen • Consulting • Phishing Tests • Vulnerability Management • Security Monitoring Cyber/information security, strategic planning, independent loan review, AND MORE. Consulting Services $ 8.6B assets under management $ 1.9B daily transaction value processed/settled Serving more than 60% of community banks across 7 states
Changes Not‑SoSimple Not‑SoSimple WWe have many clients with SIMPLE IRA plans who have been asking questions about the new contribution options that are available in these plans. Can an employer with a SIMPLE IRA plan start using some of the new provisions that were created under the SECURE and SECURE 2.0 Acts, such as the increased deferral limit, even though they’re not yet included in the SIMPLE IRA plan document? Yes. Employers may now offer an increased SIMPLE IRA plan elective deferral limit, even though plan documents do not reflect the new provision. In fact, it may be required for some companies to allow these increased limits now, depending upon the size of the company. The increased elective deferral limits apply automatically in the case of an employer that has no more than 25 employees who received $5,000 or more in the preceding calendar year. This means that for the 2024 plan year, the elective deferral limit for these companies is automatically increased to $17,600 plus a catch-up contribution of up to $3,850 for employees who are age 50 and over (110% of the stated annual limit of $16,000 and catch‑up contribution limit of $3,500). For companies that employed 26-100 employees earning $5,000 or more in the preceding calendar year, the increased deferral limit is an optional provision that an employer can elect to offer. If the employer elects to apply this increased limit, the employer must also provide a higher matching contribution of 4% (increased from 3%) or an increased nonelective contribution of 3% (instead of 2%). The IRS clarified in Notice 2024-02 earlier this year that an employer must notify employees of the increased limits if they apply, whether it’s a mandatory increase, or whether the employer is choosing to allow the increase. This notice must be included in the Summary Description that is required to be sent annually to employees no later than 60 days before the beginning of the plan year (Nov. 2). If the employer is choosing to offer the optional increased deferral provision, the employer must take formal written action to make an election to reflect the increased limits and should maintain documentation of the election in the plan’s records in addition to notifying employees with the Summary Description. Employers can also make an additional nonelective contribution of up to 10% of compensation, not to exceed $5,000 (indexed for inflation) annually per eligible employee. This optional contribution is in addition to any employee deferrals and the required employer contribution. Employers that choose to make the additional nonelective contribution must notify employees within the Summary Description. The to SIMPLE IRAs By Carrie Horn, CISP, CHSP, QPA, TGPC, SDIP, ERISA Consultant, Ascensus Colorado Banker 10
To assist employers in making these elections and documenting the elections for the plan’s records, Ascensus has created a new form, Additional SECURE and SECURE 2.0 Plan Provisions Employer Election Form, that can be used to make and document these elections. The form is designed to capture how the plan operates with respect to all new provisions (both mandatory and optional) under the SECURE and SECURE 2.0 Act. These provisions include increased deferral limits, additional nonelective contributions, optional Roth SIMPLE elective deferrals and optional Roth SIMPLE matching or nonelective contributions. In addition, Ascensus has updated the Participation Notice and Summary Description and Salary Reduction Agreement forms to also reflect these new provisions, giving the employer the ability to indicate whether these provisions apply under the plan and giving the employees the updated information so that they may make informed decisions on how much to defer into the plan. Keep in mind that the IRS has indicated that SIMPLE IRA plans will not have to be amended for these new SECURE and SECURE 2.0 provisions until Dec. 31, 2026, at the earliest. It is important for employers to document their decisions on these new provisions and how they operated the plan so that the plan may be amended properly at that time. We have a client that has a SIMPLE plan with us who is terminating the plan and replacing it with a 401(k) plan. He is asking us for a termination letter to give to his employees. Is this something that our financial organization should provide to him? Even though it is not the financial organization’s responsibility to provide a SIMPLE IRA termination notice for an employer, Ascensus has created a Mid‑Year SIMPLE IRA Plan Termination Notice that may be provided to employers to use for this purpose. As you know, an employer may now terminate a SIMPLE IRA plan at any time during the year as long as the employer is replacing the SIMPLE IRA plan with a safe-harbor 401(k) plan. The employer must give employees at least a 30-day notice that the SIMPLE IRA plan is terminating, and the notice must include specific information for it to be valid. It is up to the employer that is terminating the SIMPLE IRA plan to provide the termination notice to employees. The Ascensus termination notice includes all information required to be given about the terminating SIMPLE IRA plan. The employer must also provide a notice regarding the new safe harbor 401(k) plan and should be able to obtain that notice from the 401(k) document provider. Are new IRS model documents available yet? As of this writing, the IRS had not yet released updated model Roth IRA documents. Additional guidance is needed to determine whether Roth SIMPLE contributions may be made to an existing Roth IRA or if they must be contributed to a separate Roth IRA. In addition, it is not known whether the IRS will create new employee-level Roth SIMPLE IRA documents. The 2023 Instructions for Form 8606, Nondeductible IRAs, reference using the form to report “distributions from Roth, Roth SEP or Roth SIMPLE IRAs,” which may indicate that the IRS is intending to release new documents. It is up to your financial organization to determine whether you are ready to administer Roth SIMPLE contributions at this time. 11 Colorado Banker
Zach Bunney Senior Vice President FirstBank How did you get started in the banking industry? I went to a job fair at the University of Northern Colorado and FirstBank offered a $2,000 signing bonus. 15 years later, they are still putting up with me! What is the most rewarding aspect of your job? I have been blessed to know a lot of different people from a lot of different backgrounds, each with their own unique story. The opportunity to hear their stories and hear the passion in their voice about their goals/dreams would be enough, but then to have an opportunity to play a small role in making the dream a reality is very rewarding. What is the most important thing you’ve learned from a career in banking? I will be the first to say that I still have dues to pay, so to be honest, it is truly humbling to think others might care what lessons I have learned. Narrowing it down to one thing was too hard, so the first of two most important things I have learned is to assume positive intent — doing so changes the way you listen and the way you ultimately help people, which is what it is all about. Secondly, everything will be OK in the end. If it is not OK right now, then it is not the end. When you were a child, what did you want to be when you grew up? Like every other kid, I wanted to be a banker. :) Who is one of the most influential figures in your life? The foundation of my life and, as such, the most influential figure in my life is Jesus Christ. My faith is the lens through which I view the world, and I hope my time in banking serves to show that light to others. Additionally, I have had so many great mentors at FirstBank, and I think those people know who they are and how grateful I am. But I would be remiss if I failed to mention my wife, who keeps me grounded and focused on what matters. CBA Centerpoint Kayla Johnson Loan Officer FirstBank How did you get started in the banking industry? Growing up, I dreamed of being a large animal vet, earning degrees in equine science and business management, with plans to own a veterinary clinic. After not making it into Colorado State University’s vet school, I had to choose between a research position or starting a career. With my passion for finance, I opted for banking. Now, 11 years later, I’m thriving in the industry and loving it! What is the most rewarding aspect of your job? The most rewarding part of my job — and what makes our bank unique — is being a generalist. I get to learn a little about many areas, making each day interesting. One day, I might help an employee with a home equity loan, and the next, I could be building an Excel workbook or learning new technology. What do you like to do to give back to the community (either personally, or as a bank representative or both)? FirstBank encourages all employees to volunteer and give back to the community. In my time at the bank, I have had the pleasure of working with several non-profits including CASA, SafeHouse Denver, A Woman’s Work, Habitat for Humanity, The Inn Between, Special Olympics and so many more! Also, through my church, World Mission Society Church of God, I participate in events for the International WeLoveU Foundation and ASEZ WAO (Save the Earth from A to Z, We Are One Family) a global volunteer group aimed at becoming one by having the heart of Heavenly Mother and taking necessary action to promote more sustainable practices and make a positive impact on the environment. Events we have participated in include blood drives, park cleanups and disaster recovery events. Tell us something about yourself most people don’t know. In college, I was a rodeo queen! Colorado Banker 12
GOING BEYOND THE DESK TO HEAR THE STORIES OF COLORADO BANKERS Meiying Li AVP Alpine Bank How did you get started in the banking industry? 24 years ago, I was a childcare teacher in Aspen and was looking for a new challenge after my son was born. Alpine Bank came to my mind because I had seen that they sponsored almost every event I attended in Aspen. After my interview, I called the hiring manager, Mary Ryerson, often to find out the result. She told me she hired me because of my persistence and that I must have really, really wanted to work for Alpine Bank; also, she wanted me to quit calling her at home every evening! I have worked hard to master the English language and learn banking policies and procedures. Alpine Bank recognized my drive and has promoted me to AVP. What is the most important thing you’ve learned from a career in banking? Integrity. Always doing what you say you will do and standing up for what you believe in, supported with ethics and morality. What topic could you give a 20-minute presentation on without any preparation? FDIC insurance coverage. In this day and age, people want to protect their hard-earned money. I pride myself on being able to explain FDIC insurance coverage so the customers funds will be fully insured, while retaining deposits at Alpine Bank. I go the extra mile to assure our customers have confidence in Alpine Bank Aspen, their local community bank. Who is one of the most influential figures in your life? My husband, Danny. I came to the U.S. 29 years ago, after we were married. The move to the United States totally changed my life. I left my family and the country I grew up in and came to this strange country. I couldn’t speak or understand English. The past 29 years have been an interesting and challenging journey that has included a lifelong pursuit of learning and growth. I have embraced a different culture, different food and different work experience. Through all the changes, I have adapted and become the confident person I am today. Danny also has taught me that everything is possible if you believe in yourself and work hard to fulfill your dream. Brandon McCuistion Vice President Fowler State Bank What makes your bank unique? Fowler State Bank is unique in a few different aspects. We are a single‑branch bank that has been owned by the same great family for over 100 years. That kind of continuity and being such a staple in a community for that long creates very strong relationships with our customers that may go back multiple generations. While not unique to just our bank, we take great pride in truly knowing all of our customers and even more pride in being able to be a financial partner with them in whatever they need. What do you like to do to give back to the community? I am fortunate enough to get to work in the same community I grew up in, so I take the responsibility to give back very seriously. I serve as the president of the local Chamber of Commerce, sit on the local college’s foundation board, help with various scholarship committees and help coach the high school baseball team as well as coach various sports in the youth recreation program. What is the most rewarding aspect of your job? The most rewarding aspect of banking is being able to assist people with achieving their goals and aspirations. Those goals and aspirations are so different for everyone, but it means just as much to helping a little kid start their first savings account, someone buying their first vehicle, starting a new business or expanding an existing business. As a banker, we get to be a partner in all of those experiences and witness first-hand the successes of our customers. When you were a child, what did you want to be when you grew up? I grew up loving baseball and playing guitar, and I played both until I graduated. Since I wasn’t a prodigy in either one, and I couldn’t figure out how to put the two together, I did what any other guitar-picking baseball player does when they grow up: finance. 13 Colorado Banker
I Generational Trends Shaping Growth Goals IS MODERNIZING YOUR LEGACY SYSTEMS PART OF THE 2025 STRATEGIC PLAN? By ADVANTAGE In today’s competitive financial landscape, understanding generational preferences is crucial for community banks and credit unions aiming to grow their market share and effectively compete with big banks. Insights from a recent BAI report reveal how different generations value distinct features from their primary financial institution (PFI). To attract and retain new account holders, it’s vital not only to recognize these preferences but also to implement the right digital tools to meet and surpass their expectations. Tailoring Strategies for Every Generation Different generations have unique priorities when choosing a PFI. Here’s a breakdown of what each group seeks: • Baby boomers: Value convenience, reputation and comprehensive financial services. They look for high‑yield money market accounts, wealth management options and reliable peer-to-peer (P2P) payment solutions. • Gen X: Prioritize convenience, solid reputation and competitive rates, similar to Boomers, with an added emphasis on practical financial management tools. • Millennials: Seek cash incentives, budgeting tools and financial education. Millennials prefer institutions offering these resources, while 81% are willing to switch for a better digital experience. They also prioritize no‑fee banking. • Gen Z: Seek seamless digital experiences and mobile-centric services. Although they heavily rely on technology, they still value the reassurance of physical branches for added security. Meeting the Digital Demands To stay competitive with big banks, you must offer the right blend of digital capabilities and consumer-focused services. And while baby boomers and Gen X value branch and ATM convenience, Gen Z’s expectations are rooted in a seamless digital experience. Despite their reliance on digital platforms, Gen Z still finds physical branches important for peace of mind. This means having robust technology that integrates smoothly with what consumers want when it comes to banking. Ensuring you have the digital tools and platforms to offer a compelling user experience is essential. It could involve upgrading existing systems or finding new vendors that align with your goals. Essential Offerings for Growth Baby boomers and Gen X are significant demographics with substantial wealth, so focusing on high-value services and competitive rates is crucial. However, millennials and Gen Z are attracted to features like cash incentives and advanced digital tools. Understanding these preferences is not enough — it takes having the technology to deliver them effectively. For instance, millennials are more likely to switch PFIs for a better mobile app, highlighting the importance of investing in top-notch digital solutions. Gen X values competitive rates but also seeks out financial institutions with strong reputations and convenient service options. Colorado Banker 14
Preparing for the Future As millennials and Gen Z are poised to inherit significant wealth by 2030, there’s a unique opportunity to attract and retain these younger audiences. However, focusing solely on these younger generations without neglecting existing account holders can be a delicate balance. Baby boomers and Gen X should also be considered in strategic planning to avoid alienating any demographic. Implementing a comprehensive strategy that addresses the needs of all generations while leveraging the right technology is essential for sustainable growth. By doing so, you’ll not only meet current consumer expectations but also be well-positioned to adapt to future demands. To thrive in a competitive environment and grow market share, it takes aligning your offerings with generational preferences and investing in the necessary digital tools. By understanding what each generation values and partnering with the right technology vendors, you can enhance the user experience and stay competitive with national banks. This balanced approach will help attract new account holders while retaining your existing base, ultimately driving long-term success. Need help evaluating your legacy systems to position your financial institution for the future? Learn more about a complimentary assessment today by scanning the QR code. https://www.cunastrategicservices.com/content/ cuna/css/become-a-provider/all-providers/ advantage/advantage-request-information.html CONTACT US TODAY TO PLACE YOUR ANNOUNCEMENT AD. SHOW-OFF. THERE'S NOTHING WRONG WITH BEING A Call (801) 676-9722 or scan the QR code to get started. Place QR Code Here ▷ Show off your employees ▷ Show off your accomplishments ▷ Show off a job well done Employees are motivated when they are recognized and feel valued. This magazine is a great platform to celebrate your team’s accomplishments! Overcoming Tech Challenges with Strategic Support Integrating and upgrading technology can be complex, often presenting challenges for community banks and credit unions that may be understaffed. This is where strategic partnerships become invaluable. Collaborating with experts who specialize in working closely with the industry’s technology vendors can help seamlessly enhance your digital capabilities without being overwhelmed by the process. Such partnerships can offer the expertise needed to implement and manage advanced systems, ensuring your FI can offer the digital features that consumers demand. The added support will save you time and energy and help develop an effective action plan. This approach not only helps keep up with industry standards and an evolving marketplace, but also keeps you ahead of competitors. 15 Colorado Banker
S How SBA Lending Fits Into the Future of Banking SBA lending has been a cornerstone of small business growth for decades, but what does its future look like in a banking landscape that’s changing fast? With technology shaking up traditional processes and economic uncertainty shaping business decisions, SBA lending is becoming even more important. The question is, how does it fit into the future of banking? Let’s dive in. The Backbone of Small Business Growth First, we can’t talk about SBA lending without acknowledging its vital role in the economy. The SBA loan programs, especially the 7(a) and 504 loans, have provided lifelines to small businesses that might not otherwise have access to the capital they need. These loans, backed by the government, encourage lenders to take on more risk, and in doing so, they keep the engine of small business growth running. In a world where banks are becoming increasingly selective about who they lend to, SBA loans offer a way for banks to support small businesses while mitigating their own risk. This risk-sharing is going to be a key part of how SBA lending fits into the banking of the future. Technology Is Redefining the Game It’s no secret that banking is becoming more digitized. Fintech has already disrupted traditional lending models with fast, efficient platforms. So, where does SBA lending fit in? The answer lies in how banks and SBA lenders are embracing new technology to streamline their processes. • Automation: Digital platforms are already making it easier for small business owners to apply for loans. Automated underwriting systems are speeding up approvals and cutting down on administrative work. This is crucial, especially for banks that want to keep their operating costs low while maintaining a high volume of loan applications. • Data-Driven Decisions: Fintech firms have shown the power of data analytics in lending. SBA lenders can — and should — leverage data to make smarter, faster decisions. By using AI and machine learning, banks can evaluate creditworthiness in a way that’s more comprehensive than just looking at a credit score. This could open the door to more SBA loans for traditionally underserved markets. • Mobile Access: More business owners are running their companies on mobile devices, and banks that offer easy access to SBA loan applications via mobile platforms will have a huge competitive edge. Being able to manage the entire loan process from a phone isn’t just a “nice-to-have” anymore — it’s going to be expected. Reaching the Underserved One of the most exciting opportunities for SBA lending in the future is its potential to reach more diverse and underserved markets. Rural communities, minority-owned businesses and women-owned businesses often struggle to access traditional forms of credit. SBA lending, especially when combined with new digital tools, can bridge this gap. • Fintech Collaboration: Partnering with fintech firms that specialize in serving niche markets will allow banks to expand their reach. For example, a bank might use a fintech platform to offer SBA loans to businesses in rural areas that don’t have easy access to a physical bank. • Financial Inclusion: Digital lending platforms can also reduce biases in the lending process, making it easier for underserved communities to get the capital they need. By making the process more transparent and data‑driven, SBA loans can help level the playing field for all business owners. A Critical Tool for Economic Resilience If the pandemic taught us anything, it’s that small businesses are incredibly vulnerable to economic shocks. The Paycheck Protection Program (PPP) showed just how crucial SBA lending can be in times of crisis. As we look to the future, SBA loans will continue to be a critical tool for banks that want to help businesses weather the storms of economic uncertainty. • Economic Downturns: In times of recession or economic slowdown, traditional lending dries up. Banks pull back, and small businesses struggle to find funding. SBA loans, however, can offer a safety net. The government backing allows banks to continue lending even when the economic outlook is grim. • Sustainability: Many small businesses are now focused on building more sustainable, resilient models, and they need the right kind of funding to do so. SBA loans are perfectly suited for this, as they offer long-term, fixed‑rate financing that can help businesses invest in their future without the fear of interest rate spikes or sudden calls for repayment. Colorado Banker 16
By embracing technology, expanding access to underserved markets and offering a critical lifeline during tough economic times, SBA lending isn’t just a good strategy — it’s essential. The Competitive Advantage for Banks So, why should banks invest in expanding their SBA lending programs? The answer is simple: It’s good business. With increasing competition from fintech firms, traditional banks need to find ways to stay relevant and add value for their customers. SBA lending offers a few unique competitive advantages. • Building Stronger Relationships: Small businesses that receive SBA loans tend to be loyal customers. They know that getting an SBA loan often takes more personalized service and attention from the bank. By focusing on SBA lending, banks can foster long-term relationships with small business clients that could lead to more business down the line. • Risk Mitigation: The government backing on SBA loans means banks can offer credit to businesses they might otherwise deem too risky. This helps diversify their loan portfolios and spreads risk across a broader range of industries and customer types. • Revenue Generation: While SBA loans might not have the highest margins, they offer a steady stream of revenue. Additionally, they create cross-sell opportunities for other banking services, such as business accounts, credit cards and payroll services. Regulatory Challenges and Opportunities Of course, no conversation about the future of banking would be complete without touching on regulation. The regulatory environment for SBA lending is complex, but it’s also evolving. As technology changes how loans are delivered and monitored, regulators are paying attention. Banks that are proactive about adopting new technologies while staying compliant with SBA regulations will be well-positioned for the future. • Streamlined Compliance: Just as technology is improving loan processing, it’s also making it easier for banks to stay compliant. Automated reporting and real-time monitoring tools will allow SBA lenders to meet regulatory requirements more efficiently, reducing the burden on compliance teams. • Future SBA Programs: We can expect that as the economy evolves, the SBA will roll out new programs to meet emerging needs. Banks that are already active in the SBA lending space will be the first to capitalize on these opportunities. The Future Is Bright for SBA Lending In a world where small businesses are becoming more central to economic recovery and growth, SBA lending is poised to play an even bigger role in the future of banking. By embracing technology, expanding access to underserved markets and offering a critical lifeline during tough economic times, SBA lending isn’t just a good strategy — it’s essential. Banks that understand this will not only support small businesses but also position themselves for long-term success in a rapidly changing financial landscape. The future of banking is digital, inclusive and resilient, and SBA lending is right at the heart of it all. 17 Colorado Banker
I In Memoriam DONALD LAWRENCE STURM (1932-2024) It is with great sadness that we announce the passing of Donald Lawrence Sturm, a leader and philanthropist, who departed this world peacefully on Aug. 17, 2024, at the age of 92. “The banking and business industries have lost a friend, mentor and visionary,” reflected Jenifer Waller, president and CEO of Colorado Bankers Association. Born in Brooklyn, New York, in 1932 to Mark and Sophie Sturm (of blessed memory), Don’s remarkable life journey began with a strong educational foundation, culminating in a Juris Doctorate from the University of Denver and a Master of Laws in Taxation from New York University. Don’s distinguished career began as a trial attorney for the IRS before he joined Peter Kiewit Sons’ Co. in Omaha, Nebraska. Over 28 years, he ascended to the position of vice chairman, where he was instrumental in significant acquisitions and groundbreaking projects, including the landmark 1984 acquisition of Continental Group Inc., and the development of China’s first modern coal mine. His expertise in negotiation and strategy left an indelible mark on the industry. In 1991, after leaving Kiewit, Don transitioned to entrepreneurship, real estate development and investment. He played a pivotal role in shaping Colorado’s landscape, acquiring multiple banks that formed ANB Bank and spearheading the development of the Meadows at Historic Castle Rock, now home to over 20,000 residents. His vision was also evident in the redevelopment of Cherry Creek, exemplified by the transformation of the old Tattered Cover building into Fillmore Plaza. Don’s impact extended far beyond business. His philanthropic efforts enriched numerous institutions across Colorado, including Judaism Your Way, the University of Denver’s Sturm College of Law and the Jewish Community Center of Denver. His enduring belief in the power of individuals to effect change was reflected in his substantial foundation, dedicated to improving lives across the state. Inducted into the Colorado Business Hall of Fame in 2022, Don was renowned for his sharp wit, strategic thinking and unwavering personal ethics. “Don approached every issue with a keen sense of curiosity, fairness, integrity and humility,” stated Koger Propst, CEO of ANB Bank. “The banking industry is built on trust. Trust is given to us by our customers and communities, and as ANB Bank’s primary owner and chair of our board for over 35 years, Don keenly understood that it must be vigilantly safeguarded. Don was our North Star … our moral compass,” Propst concluded. He was a devoted husband to Susan Sturm (née Morgan), with whom he shared 36 years of love, and a loving father to four children: Robert, Melanie (Marc Zachary), Stephen (Sydney Hodgson Sturm) and Emily Sturm Ehrens (Ben Ehrens). He also cherished his grandson, Zane Zachary, and a wide circle of friends and family, all of whom were touched by his kindness and commitment to strong familial bonds. Don Sturm leaves behind a legacy of high-impact philanthropy, business acumen and a deep belief in the power of community. He will be forever missed and remembered for the brightness he brought into the lives of all who knew him. Colorado Banker 18
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