Pub. 6 2016-2017 Issue 2

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... It’s Time to Repair the Breaches Y our Colorado Bankers Associat ion has for years he lped to l e ad t he cha r ge to l e ve l t he pl ay- ing f ield for t he s t ate’s f inanc ia l ins t i t ut ions . Every day, Colorado banks compete against tax- and rules-exempt credit unions and the Farm Credit System to serve customers who are unwittingly being used by these en- tities to secure special treatment they do not deserve. Those institutions don’t have to adhere to the same rules and regulations that banks do. They don’t pay taxes like banks do. Meanwhile, in Colorado credit unions have tripled their small business lending in Colorado as well as tripling their assets since 2004. Total FCS lending in Colorado has grown in recent years, from$3.61 billionDecember 31, 2012, to $3.92 bil- lion at the end of 2013, and to $4.89 billion at the end of 2014. And, FCS lending in Colorado, as a portion of total FCS lending, has grown in recent years, from 1.88% at the end of 2012, to 1.95% at the end of 2013, and to 2.25% at December 31, 2014. CBA has worked hard to ensure our state’s lawmakers are aware of the inequity, and worse, that Colorado borrowers are not benefitting from the special treatment that credit unions and the FCS enjoy – in their name. With generous support from the American Bankers Association's Fund for Economic Growth, the Colorado Bankers Association commissioned a study to expose abuse of the Farm Credit System, particular- ly in Colorado. Simultaneously, CBA commissioned a study to shed light on the undeserved advantages Colorado credit unions enjoy. While credit unions and the FCS are expanding their reach and raking in profits, Coloradans are not reaping the benefits they were promised. 2013 HMDA data shows that 92 percent of all Colorado credit unions made not a single loan to low income individu- als in the state. They neglect to do so despite being statutorily bound to meet the credit and savings needs of individuals of modest means. Serving these separate groups, versus the general public, is why they are tax exempt. And, they avoided paying $64 million in taxes, annually. Coloradans are being shortchanged. Meanwhile, the FCS has exploded into a $300 billion be- hemoth, no longer focusing on supporting beginning young and small farmers. Because of the tax exemption the FCS has avoided paying an estimated $100million in taxes in Colorado in 2014 alone. Think how far that money could go to assist our state and local governments in serving our communities. We have generated “pocket cards” for bankers and others to keep handy when speaking with lawmakers, regulators and others about the breaches of duty and privilege by the FCS and credit unions across the state. On our website you’ll find links to executive summaries and the full reports compiled by our experts for your use. While we would like to have included a more specific call- to-action on each of the cards, it simply isn’t possible now, particularly due to the political environment andmajor chang- es ahead with the 2016 presidential election. Nonetheless, it is important that these issues stay top-of-mind and relevant to our lawmakers as they ready for (hopefully) more decisive action in 2017. We are not alone in this fight. Our friends at ABA and in our fellow state associations are also carrying the torch to remedy this unjust business environment. Reform Farm Credit is a nationwide campaign seeking to reign in the FCS. The It’s Time to Pay campaign is a similar effort to make our nation’s credit unions play -and pay- by the same rules as banks. I encourage you to peruse these studies and to speak out whenever possible about making things right in Colorado and across the country. We all have a role to play and your voice is valued and needed. Feel free to contact me should you have questions or com- ments.  Best, Don Childears President and CEO – Colorado Bankers Association