Pub. 5 2015-2016 Issue 3

6 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 A Word From CBA... There Are Things to be Thankful for in 2015 Over several weeks this summer and fall, CBA staff and board members have been traveling across the state meeting with bankers to discuss pressing issues and taking the pulse of the industry in Colorado. We’ve heard frombankers representing institutions big and small, from areas rural andmetro. We know they all need the same things: regulatory relief and a level playing field for the financial services industry. Banks are bogged down with compliance demands. Their customers are overwhelmed by mortgage loan paperwork. They are too often forced to say no to a customer, when they want to say yes. And, there is the ever-present tarnish on the industry’s public image – albeit largely undeserved. But there is good news amid challenge. Loan demand is solid. Housing prices are soaring in Colorado. Auto loan originations are the highest they’ve been in a decade. More people are opening credit card accounts. What’s more, bank loan write-offs have declined to pre-crisis levels. Colorado-domiciled banks and savings institutions had a net income of an estimated $256million in the second quarter, up ap- proximately 4 percent from the industry’s earnings a year before. An about $12 million rise in net operating income – including a 5 percent increase in net interest income and around an 8 percent increase in noninterest income – drove the earnings increase. We have seen some improvements at the regulatory level, too. In September, the banking agencies advanced changes to the Call Report. The proposed changes would delete certain existing entries, increase the reporting thresholds for other entries and revise reporting instructions for certain entries. It also would add or revise generally applicable entries, including – for exam- ple – raising the time deposit size threshold to correspond with higher FDIC insurance limits. If finalized, the proposed report- ing changes would take effect in December 2015 or March 2016. CBA and other bank advocates continue the push for regula- tory relief, as federal lawmakers continue to collect co-sponsors for bills that would make doing business easier for banks – and more importantly, their customers. A bill from Sen. Richard Shelby of Alabama, who chairs the Senate Banking Committee, would allow mortgages to receive the legal protections of “Qualified Mortgage” status if banks keep the loans on their own books rather than selling them on the secondary market. And the TAILOR Act, introduced by Rep. Scott Tipton of Colorado and championed by all 50 state bankers associations, including ABA and CBA, would require regulators to carefully tailor rules to the different kinds of banks they su- pervise, based on banks’ business model and risk profile. These fixes, and especially Rep. Tipton’s bill, would go a long way toward replacing the one-size-fits-none regulatory regime of Dodd-Frank with a more flexible approach that aligns with the different business models, customer bases and risk profiles of America’s 6,400 banks. And while the challenge of banking themarijuana industry in Colorado hasn’t changed – it’s still illegal – but state and federal public officials continue to seek a solution. Colorado CongresswomanDiana DeGette threwher hat in the ring, developing a bill rivaling one carried by fellow Coloradans Senators Cory Gardner andMichael Bennet, and another by Rep. Ed Perlmutter, that would create a carve-out from federal law for banks operating in states where marijuana has been legalized, allowing them to serve the industry. CBA remains your stalwart ally and we are thankful for your membership and commitment to your industry. Please don’t hesitate to contact us if we can do anything for you.  Don Childears President and CEO Colorado Bankers Association