OVER A CENTURY: BUILDING BETTER BANKS — Helping Coloradans Realize Dreams March/April BANKING LEADERS AND LEGISLATORS UNITE AT THE 2025 CBA LEGISLATIVE BRIEFING
Discover® Debit Gives You The Advantage. When it comes to your debit program, you should always have the upper hand. Discover® Debit puts you in control of the board with superior economics, marketing support, and personalized service. Checkmate. Debit that’s here for you.® Find out more at DiscoverDebit.com/Win Stay One Move Ahead of the Competition
©2025 The Colorado Bankers Association (CBA) | The newsLINK Group LLC. All rights reserved. Colorado Banker is published six times per year by The newsLINK Group LLC for CBA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of CBA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Colorado Banker is a collective work, and as such, some articles are submitted by authors who are independent of CBA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. Jenifer Waller President & CEO Alison Morgan Director of State Government Relations Brandon Knudtson CFO & Director of Membership Lindsay Muniz Director of Education Michelle Provan Director of Communications 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 20 22 2024-2025 Issue 5 4 CHAIRMAN’S MESSAGE Swipe Fee Bill Will Do Far More Harm Than Good By Kevin Erickson, Chairman, CBA 6 Banking Leaders and Legislators Unite at the 2025 CBA Legislative Briefing By Michelle Provan, Director of Communications, CBA 8 Glue and Tap Fraud Protecting Your ATMs and Cardholders from Emerging Scams By Alyssa Knapp, Financial Technology Solutions Consultant, Cook Solutions Group 10 The Section 1033 Final Rule Providing Community Banks With the Perfect Innovation Opportunity By Bradley Wallace, Director of Compliance, CSI 11 Doing Your Homework Why Online Reviews Matter for Banking Services By Corey Wrinn, Rivel Banking Research 14 CBA Centerpoint Going Beyond the Desk to Hear the Stories of Colorado Bankers 16 2025 Credit Portfolio Risk and Balance-Sheet Management Outlook By Mary Ellen Biery, Senior Strategist & Content Writer, Abrigo 18 ACTSM Deposit Program A Simple Solution for Improving Your Bank’s CRA Rating By Diane Ellis, Senior Managing Director, IntraFi 20 Cherrywood Enterprises Presents Debt Selling 101 By Craig M. Geisler, CEO, Cherrywood Enterprises LLC 22 Unlocking Growth Why a Strong Overdraft Strategy Matters More Than Ever By John Cohron, Chief Executive Officer, ADVANTAGE 24 Crypto Scams and Crypto Fraud Detection for Financial Institutions By Terri Luttrell, CAMS-Audit, CFCS, Compliance and Engagement Director, Abrigo 3 Colorado Banker
Swipe Fee Bill Will Do Far More Harm Than Good By Kevin Erickson, Chairman, CBA CHAIRMAN’S MESSAGE While presented as a solution, the bill fails to account for the full range of consequences it will leave in its wake. The use of the phrase “unintended consequences” when discussing proposed legislation has become almost cliché, and yet it remains an incredibly useful and accurate phrase to describe the effects of bills that may be unforeseen to proponents but which are no less real. HB25-1282 is the type of bill for which that phrase is meant for. A recent op-ed suggests that HB25-1282 — which, among other things, would place artificial limits on credit card interchange fees and eliminate them in specific transactions — would save small businesses money. Unfortunately, while it may be well-intentioned, the bill has several inherent flaws which, instead of saving consumers and small businesses money, will in fact cost them far more in the long run. Limiting credit card fees may sound good in theory, but in practice will cause significant harm to small businesses and consumers alike. It is important first to understand what interchange fees are and what they are for. Like any product or service, there are costs associated with providing credit cards and making purchases with them. Every time you make a payment with a credit card, there are costs associated with processing that transaction, protecting the information on the card, and providing consumer benefits, such as reward points. The fee that is charged with each use of the card — the interchange fee — goes towards covering those costs of the processing, fast transfer of funds to the merchant, stringent back-end security and cardholder benefits that make modern electronic payments and purchases convenient and safe. Accordingly, limiting or erasing those fees may Colorado Banker 4
bring some savings to large retailers, but that will come with negative impacts for everyone else. The first risk of this bill is the threat to consumer rewards. Credit card reward programs, such as points and travel miles, are an important financial benefit for many Coloradans. Furthermore, Colorado ranks fourth nationally as a destination for reward point redemption. The passage of HB25-1282 could result in fewer benefits — or even the complete elimination of such programs — by limiting the interchange fees that help fund them. Many Coloradans rely on these reward programs. Of course, this will also have a severe impact on the industries and businesses around the state that rely on tourist dollars. When restrictions on debit card interchange fees went into effect, reward programs tied to debit cards were revoked; the same is expected to happen for credit cards should this bill become law. HB25-1282 includes a ban on charging interchange fees on taxes and gratuities. Should the bill become law, the most likely outcome will be that tips and taxes will be required to be paid by cash or check. It is unrealistic to assume the financial industry will cover the cost of processing, the fraud risk and the credit risk without compensation is unreasonable. There is no need for this: Merchants are already permitted to add a surcharge to transactions to cover the cost of interchange. Merchants can already require the taxes and gratuities to be paid in cash. Colorado small merchants are given a vendor fee from the state to compensate them for collecting and submitting taxes. It is doubtful that taxes paid to local and state governments would be paid by card. Again, the bill would require that financial institutions accept all the fraud risk and credit risk and process the transaction without compensation. It is highly unlikely they will. The bill lowers permissible interchange that can be charged in a charitable transaction to a fee so low that it is unlikely the charitable contribution would be accepted by card if the bill becomes law. This will reduce the amount of charitable contributions made. Finally, among the most significant concerns with HB25-1282 is the potential for costly legal battles. A similar law passed in Illinois is facing major legal challenges. A federal court subsequently granted injunctions that exempt national banks and financial institutions from state-imposed fee limitations. If HB25-1282 passes, Colorado could soon find itself embroiled in expensive litigation, wasting taxpayer dollars to defend a law that may violate federal statute and ultimately prove unenforceable. Colorado taxpayers could end up footing the bill for a costly legal battle with little to show for it. The bottom line is that HB25-1282 does more harm than good. While presented as a solution, the bill fails to account for the full range of consequences it will leave in its wake. This bill would drain taxpayer dollars through costly legal battles, disrupt transactions, complicate the payment process and eliminate valuable consumer rewards programs. In the long run, it will — unintentionally — harm the very groups it seeks to protect. 5 Colorado Banker
Your involvement is crucial to the continued growth and success of Colorado’s banking industry, and together, we are shaping a bright, prosperous future for the communities we serve. Banking Leaders and Legislators Unite at the 2025 CBA Legislative Briefing By Michelle Provan, Director of Communications, CBA The 2025 Colorado Bankers Association (CBA) Legislative Briefing was a landmark event, drawing together a diverse group of banking executives, elected officials and policy experts to explore the evolving future of banking in Colorado. Held next to the state capitol, this key gathering has become an essential platform for fostering collaboration, strengthening relationships and addressing the most pressing legislative challenges currently shaping the sector. One of the most anticipated moments of the event was the recognition of outstanding industry leaders who have demonstrated unwavering dedication to both banking and the communities they serve. The Bankers of Distinction award is CBA’s tribute to those who embody the values of excellence, innovation and leadership. This year’s honorees included: • Brittany Brown, FNBO • Chris Picardi, KeyBank • Christa Phillips, Wells Fargo • Christina Kraft, Bank of Colorado • Jason Jones, Adams Bank & Trust • Mariann Johnston, Bank of Colorado • Mark Hall, Vectra Bank • Mark A. Mooney, First Interstate Bank • Mary Ryerson, Alpine Bank • Matthew J. Baldner, ANB Bank • Sherry L. Waner, First Southwest Bank • Zach Bunney, FirstBank Colorado Banker 6
In addition to honoring remarkable bankers, CBA also celebrated eight Legislators of Distinction for their steadfast advocacy and support of the banking sector, as well as their commitment to advancing legislative priorities that benefit both the financial community and the broader economic landscape of Colorado. The 2025 honorees included: • President of the Senate James Coleman • Senator Jeff Bridges • Senator Larry Liston • Senator Mark Baisley • Representative Meghan Lukens • Representative Naquetta Ricks • Representative Ron Weinberg • Representative Rose Pugliese In her remarks, CBA President and CEO Jenifer Waller reflected on the significance of the event, saying: “The CBA Legislative Briefing is more than just an event — it’s a critical opportunity to unite industry leaders with policymakers to engage in discussions on the issues that affect both banking and the broader Colorado community. The relationships forged here lay the foundation for a stronger, more forward-thinking financial sector.” Beyond recognition, the event also provided a dynamic space for discussing key issues shaping the future of banking, from economic trends and regulatory changes to the technological advancements transforming the sector. These important conversations highlighted the ongoing need for collaboration between financial institutions and government representatives, ensuring that the policies being shaped meet the evolving needs of Colorado’s diverse communities. CBA extends its sincere gratitude to our Premier Sponsors, whose generous support made this event possible: • Graduate School of Banking at Colorado • Vectra Bank Colorado • Federal Home Loan Bank of Topeka Finally, CBA would like to express its deepest thanks to all attendees for their participation in this vital event. Your involvement is crucial to the continued growth and success of Colorado’s banking industry, and together, we are shaping a bright, prosperous future for the communities we serve. 7 Colorado Banker
Glue and Tap Fraud PROTECTING YOUR ATMS AND CARDHOLDERS FROM EMERGING SCAMS By Alyssa Knapp, Financial Technology Solutions Consultant, Cook Solutions Group Introduction What is glue and tap fraud? Glue and tap fraud is a scam where criminals sabotage an ATM by filling the card reader slot with glue, forcing the victim to use the “tap” feature. After the victim completes their transaction, they might forget to select the “finished” option on the screen, leaving their session open. This oversight allows the criminal to withdraw money from the victim’s account. The Problem How is it different than other forms of fraud? Why is it a growing cause for concern? Glue and tap fraud stands out from other types of fraud primarily because it is a sophisticated form of social engineering. Unlike traditional fraud, which often relies on technology or brute force to exploit vulnerabilities, this method manipulates human behavior. Criminals involved in glue and tap fraud usually pose as helpful bystanders. They might approach the victim under the guise of helping when the card reader appears to be malfunctioning. By doing so, they subtly encourage the victim to use the “tap” function, making the victim believe that it is the only viable option to complete their transaction. This type of fraud is particularly concerning because it preys on the trust and helpfulness of individuals, making it more difficult for victims to recognize the scam. Additionally, as more ATMs and payment terminals adopt contactless technology, the potential for this kind of fraud is increasing. The growing prevalence of this scheme makes it a significant threat, as it combines both psychological manipulation and technical interference, leading to substantial financial losses for unsuspecting victims. Furthermore, the reliance on human interaction in this fraud makes it harder to detect and prevent through conventional security measures, thus posing a growing challenge for banks and financial institutions to protect their customers. The Solution What steps can I take to protect my machine and cardholders? To combat this type of ATM social engineering attack, it is essential to educate your cardholders on recognizing and reporting any suspicious behavior near your ATMs. Awareness is a key defense in preventing these scams. Beyond cardholder education, Cook Solutions Group offers a range of security solutions designed to protect ATMs from such attacks. Our integrated, layered approach combines AI surveillance, transaction validation and screen recording, creating a robust defense against both physical and digital threats. Learn more about how we can help by visiting www.cooksolutionsgroup.com. 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
The Section 1033 Final Rule PROVIDING COMMUNITY BANKS WITH THE PERFECT INNOVATION OPPORTUNITY By Bradley Wallace, Director of Compliance, CSI After more than a year of debate and uncertainty, the Notice of Final Ruling on section 1033 is finally here. The vast majority of community banks — with the exception of those with fewer than $850 million in assets — now face a compliance timeline of about two to five years, depending on asset size. However, this new open banking regulatory landscape is about more than compliance. It’s about embracing innovation and the opportunities it creates for community banks to better understand their account holders — and to acquire and retain them. With the Final Rule in place, community banks can now take the steps to prepare for and capitalize on the opportunity 1033 presents when the compliance deadline arrives. The following are a few things community banks should focus on between now and then. Updating Vendor Due Diligence and Gaining Alignment With Service Providers How community banks assess and model risk will need to change, especially when integrating third parties like fintechs and core providers. The growth of open banking over the last decade has created a complex web of partners, technologies and data flows. A lack of control until now can increase the risk that comes with data living with multiple entities, each with its own set of standards and processes. Compliance teams should start an open dialogue with their vendors to assess their current data standards, how they update their policies as a result of the Final Rule, and how they manage user controls and permissions. Start the Discussion About Customer Education and Awareness Community banks have a fundamental advantage over their national competitors: They understand their local markets and provide a more intimate banking relationship with their customers. Lean into that advantage. Take the time now to determine how you can effectively communicate the impact 1033 will have on them. How will you engage with every account holder every year to reauthorize data-sharing permissions? How do you reach the digital-savvy millennial versus the 85-year-old retiree who still writes checks and prefers mailed statements? Create that policy now so that, when the deadline comes, it’s embedded in every process, employee and department. Embrace Innovation Community banks have several years to meet the 1033 compliance deadline. Use that time to gain even greater insight into what your account holders want. That starts with reducing friction within existing products and workflows, such as digital banking, account opening and lending applications. But what else do your account holders want and need? Hold focus groups, distribute a survey to critical customer segments, and conduct one-to-one outreach to loyal customers and those at risk of leaving. Build a policy for tellers and in-branch representatives to ask branch visitors what else they’d like to see from your bank. Leverage existing customer data to yield insights about individual behavior and trends at scale. Collect those inputs, analyze them, then assess how you can adjust your offerings and implement new ones across your most important lines of business and find the next solution that gives customers what they want and perhaps something they didn’t even know they wanted. That way, when the time comes, not only has your community bank deepened its existing relationships and minimized the risk of losing customers — it will be fully prepared to welcome new ones with open arms and a full suite of solutions that satisfy both their expectations and their needs. Bradley Wallace is the director of compliance at CSI, where he works directly with community banks of all asset sizes to understand and meet evolving regulatory and compliance requirements as they innovate and grow. Colorado Banker 10
Online reviews have become a crucial factor in shaping consumer decisions across various industries, including the banking sector. The influence of these crowdsourced opinions is undeniable, as consumers increasingly seek transparency and authenticity in their choices. In research exclusive to the Financial Brand conducted by Rivel Banking Research in Q2 2024, among a national sample of banking consumers, 78% of banking consumers consistently utilize online reviews when they are deciding on their new home for a bank account. This staggering statistic underscores the power of online reviews in swaying consumer behavior and highlights the need for financial institutions to prioritize their online reputation management strategies. As consumers navigate the complexities of selecting a banking partner, they turn to the collective wisdom of their peers, seeking insights into everything—from customer service quality to account fees and digital banking experiences. Digital Word of Mouth A generational divide is taking place in not only banking activity, but marketing. It’s no surprise that previous research has shown that younger generations have flocked to their mobile app for their everyday banking. However, this digital affinity extends beyond just app usage—younger consumers are also more inclined to rely heavily on online reviews when selecting financial institutions. Millennials and Gen Z consumers, having grown up in a world saturated with online information, have developed the keen ability to sift through vast amounts of user-generated content and place significant trust in the collective experiences shared by their peers. According to Rivel’s research from Q2 2024, 88% of both generational groups rely heavily on online reviews when evaluating a new financial institution or banking product. Only 78% of Gen X consumers and 61% of Baby Boomers have the same level of trust and usage. Unlike older generations who may prioritize personal experiences, recommendations from 1 COREY WRINN, RIVEL BANKING RESEARCH Why Online Reviews Matter for Banking Decisions HOMEWORK DOING YOUR Why ask one person for a recommendation when you have the wisdom of millions at your fingertips? 11 Colorado Banker
family and friends, or traditional advertising, these younger cohorts are more likely to consult online review platforms, social media, and other digital channels to inform their banking decisions. This reliance on online reviews aligns with their preference for instant access to information and their comfort with leveraging digital resources for decision-making processes. With that mindset, where should banks focus on managing and tracking their ratings, scores and reputation across the web? The Right Platform Matters Consumers are looking for good products, good value and, importantly, good service. Using customer reviews to go comparison shopping is secondary nature now. Mobile searches for “bank near me” or “best CD account near me” immediately bring a user to an interactive Google Map with recommendations. Ensuring your bank or credit union is on that map and rated highly is essential to not only brand awareness but consideration for new business. In Rivel Banking Research’s study for the Financial Brand, consumers indicated that they rely on this top-level, Google Review framework 76% of the time when deciding on a new financial institution or banking product. While 37% of Baby Boomers are not using these Google Reviews, more than 70% of the other generations are. While the ubiquity of Google Reviews is its most important attribute, it’s also flexible for those willing to put in a little time and effort. Consumers can utilize readily available Google Reviews in a few different ways in their research journey, including checking star ratings, seeing locations, reading multiple reviews, looking at the most recent reviews, identifying common themes and evaluating the bank’s responses to complaints. However, not all platforms are relied upon the same. In Rivel’s research, over 40% of consumers have never heard of Bankrate, WalletHub or SmartAsset. Only the Better Business Bureau and YouTube have reliance scores equal to or above Google’s, positioning them to be great secondary resources for banks and credit unions. YouTube is being relied upon for over 50% of Gen Z and Millennials while the BBB is used by over 73% of Gen X and Boomers. According to research conducted at the Harvard Business School, consumers react most strongly when a review contains more information and is fully detailed. Additionally, for a site like Yelp, a one-star increase was found to lead to a 5-9 % percent increase in revenue. To improve visibility on review results, the key action banks should take is proactively requesting customer reviews. Although dissatisfied customers often voice their complaints on social media platforms, satisfied customers rarely leave positive reviews unless explicitly prompted by the bank to do so. 2 PLATFORM USAGE BEYOND GOOGLE REVIEWS More than Google Reviews Equal to Google Reviews BBB YouTube Yelp CFPB Nerd Wallet Reddit Facebook Bankrate WalletHub Smart Asset Colorado Banker 12
Your Reputation Among Customers Still Reigns Supreme While online reviews and individual research play a crucial role in the consumer decision-making process, personal recommendations from trusted sources still carry significant weight, especially when it comes to financial matters. This is evidenced by Rivel's semi-annual research among banking consumers, where a staggering 48% agreed that it was especially important to get the recommendation of a friend or family member when choosing a new bank. Interestingly, the younger age groups are even more likely to lean on those they trust—54% of Millennials and 57% of Gen Z consumers are looking for advice. This trend suggests that, despite their digital nativity, these tech-savvy cohorts still value the opinions and experiences of their inner circles when it comes to matters as consequential as selecting a banking institution, as it’s a task they may not have undertaken before. Moreover, this could be attributed to the long-term implications of such choices. Despite the wealth of information available online, many consumers still value the opinions of those closest to them, perceiving their firsthand experiences as more reliable and trustworthy. This highlights the enduring importance of cultivating strong relationships with existing customers, as their satisfaction can directly impact the bank's ability to attract new clients through personal recommendations. Financial institutions would be wise to prioritize delivering exceptional service and fostering a positive customer experience, as satisfied customers can become powerful advocates, driving growth through their personal networks. For more information on Rivel Banking Research’s benchmarking, market opportunity highlights, and on-hand brand perception insights for your institution, contact Corey Wrinn, Managing Director, Rivel Banking Research at cwrinn@rivel.com cwrinn@rivel.com. 3 "Although dissatisfied customers often voice their complaints on social media platforms, satisfied customers rarely leave positive reviews unless explicitly prompted by the bank to do so." 13 Colorado Banker
Sam Anderson Vice President, Credit Officer IV ANB Bank How did you get started in the banking industry? I am a third-generation banker and was exposure to banking from a young age by watching my father build a lifelong career in the industry. Upon graduating college, an opportunity arose to be an underwriter with ANB bank. I thought the chance to understand credit and learn more about banking could be a great start to a career, even if it didn’t lead to a life-long career. Nine years later, I am still with ANB and have enjoyed taking on a variety of roles and responsibilities within the bank’s central credit department, building a banking career of my own. What is the most rewarding aspect of your job? The fact that we, as a bank, are involved in our customers’ most meaningful endeavors is always both rewarding and humbling to me. It is extremely rewarding to assist as a bank in growing someone’s business, with purchasing a new home or building, or by providing financing for low-income housing in communities across our footprint. It is always a point of pride when I am out in the community and recognize a project ANB helped finance that has made a positive impact on the community. What are you most proud of in your professional life so far? In 2020, when we were in the initial throes of the pandemic and figuring out how to navigate PPP loans, I was awarded a unique opportunity to assist with building an internal bank process to get PPP applications accurately submitted to the SBA and ultimately funded for our scrambling customers. The work was fast-paced and the hours long, but our ability to deliver during a time of need for our customers — and then to actually pick up many new customers along the way because ANB was quick to act and our service was attentive and personal — was an incredibly rewarding experience. What do you geek out about? Ice hockey! I currently skate twice a week in rec leagues and have played consistently since age four. I try to follow all things hockey-related, including the NHL, collegiate and even Canadian major junior teams. CBA Centerpoint Drew Esquivel Vice President FirstBank How did you get started in the banking industry? I started in the banking industry right after college. However, I was a non-traditional student. While in school, I worked for a company that conducted loss control inspections and premium audits. Initially, I wasn’t sure if I wanted to stay in banking long-term, but I decided to give it a shot and ended up really enjoying it. What is the most rewarding aspect of your job? I am fluent in Spanish, allowing me to work with the Hispanic community. Being able to build relationships while offering tools for financial literacy is the most rewarding part for me. I enjoy seeing my customers, who came to this country with very little, build their businesses and real estate portfolios, and create generational wealth to leave for their children. What topic could you give a 20-minute presentation on without any preparation? Enduring dad jokes for 20 minutes could be quite challenging! On a more serious note, I am passionate about discussing capitalism, not just as an economic system but also as a philosophy and its positive impact over the past 250 years. I have studied this topic for many years and believe morality and capitalism are not mutually exclusive as many would think. Instead, they complement each other and contribute to creating a better world. What is your favorite movie or book, and why? My favorite book is “The Great Gatsby.” It was one of the first books that I truly enjoyed reading. The story is captivating, and while Jay Gatsby may not have made the best choices, he is an example of how your circumstances do not define you. Fun fact: I collect copies of “The Great Gatsby.” Tell us something about yourself most people don’t know. I was adopted and later in life discovered my biological family. I spent two years as a missionary in Mexico City, which helped me connect with my heritage. During COVID, I took a leap of faith and did an ancestry DNA test, which ultimately led to me connecting with my biological sister. She is now one of my closest friends. Colorado Banker 14
GOING BEYOND THE DESK TO HEAR THE STORIES OF COLORADO BANKERS Brita Jones Director of Training Bank of Colorado How did you get started in the banking industry? My high school encouraged us to explore various career paths through job shadowing. I chose to shadow both a dental hygienist and a banker. It didn’t take long for me to realize that dental work was not my calling! However, I found my experience at the bank quite exciting. Fortunately, during my senior year, I participated in a work/study program at a local family-owned bank. I was given various tasks, from shredding old documents in a dusty basement to microfiche scanning, encoding tickets, filing reports and serving as a teller. After high school, I worked at another family-owned bank in Lincoln, Nebraska, while attending college. Upon graduating, I moved to Colorado where I’ve continued my banking career for the past 20 years. Fun fact: My initial job-shadowing experience was with Pinnacle Bank (owned by the same family as Bank of Colorado), bringing my journey full circle from Nebraska in 1999 to joining Bank of Colorado in 2017! What is the most rewarding aspect of your job? Being involved in the onboarding process for all our new employees and witnessing their growth from the start is extremely fulfilling. I truly enjoy meeting everyone as they embark on their exciting new journey with Bank of Colorado. Building strong connections with our staff and aiding in their professional development through training and resources keeps me motivated and engaged. I take great pleasure in seeing individuals join us with no prior banking experience and, over time, advance into different roles within the company, expanding their skills and discovering their passion for banking, much like I have. What makes your bank unique? I have always valued working for family-owned banks, and Bank of Colorado is the fourth such bank in my career. The sense of family here is deep-rooted. From the moment I joined, my capabilities, ideas and suggestions were met with trust and support. The internal culture of our bank extends outward to our customers, making them feel like part of the family as well. We stand with our customers and communities through their challenges and celebrations alike. What did you want to be when you grew up? Banking has always been a passion of mine. As a child, my grandma would give me blank deposit slips and old checks to play with, while my grandpa regularly visited my pretend bank as my favorite customer. We even set up a “pretend ATM!” I also had an interest in education, and it seems I’ve managed to blend both interests seamlessly in my career. What is your favorite book and why? My recent favorite read is “The Women” by Kristin Hannah. As an avid reader of historical fiction, I found this novel particularly powerful. It beautifully highlights deep friendships, courage and immense strength. Furthermore, it casts a well-deserved spotlight on the women who served in the military during the Vietnam War, addressing significant yet often overlooked topics. 15 Colorado Banker
Likely Trends Are Shaped by a Dynamic Rate Environment The top issues facing executives managing credit portfolio risk and the balance sheet at financial institutions are shaped largely by the dynamic rate environment, according to Abrigo’s outlook for major trends in the year ahead. Based on comments from the Abrigo Advisory Services team and our bank and credit union clients, executives will have their work cut out to manage profitability, balance sheet growth and credit risk. Both groups were recently asked to identify top priorities and trends ahead, and many pointed to efforts to manage the various impacts of still-high interest rates — even before Fed officials indicated they could reduce the number of potential rate cuts in 2025 from previous expectations. Interest rate uncertainty will mean banks and credit unions focus on understanding and managing interest rate risk, pricing and customer behavior related to prepayments and deposits, Abrigo’s advisors say. Advisors and customers alike say growing deposits will be a primary focus, especially for institutions looking to grow and manage funding costs. Several customers also say that lowering non-interest expenses and optimizing institutional processes are top priorities in 2025. Here’s a quick look at some trends and issues likely to affect banks and credit unions this year. Priority: Managing the Risks of Interest Rate Uncertainty Abrigo experts have noticed a growing shift in clients’ concerns toward interest rate risk, so one focus will be managing that. Dave Koch, managing director of Abrigo Advisory Services and a lead faculty member of the Graduate School of Banking at the University of Wisconsin-Madison, said that with additional rate cuts, financial institutions could face a squeeze on net interest margin spread. “The deposit side may see continued pricing pressures, with CD and savings rates potentially remaining higher than pre-crisis levels,” he said. “On the lending side, loan rates are expected to follow prime rates down, but the spread over prime may remain higher due to lingering credit risk concerns.” As a result, banks and credit unions will face challenges in managing repricing risk (both for loans and deposits that need to be repriced at lower rates). “Stability of funding will be a critical focus, so institutions need tools to price risks accurately on both loans and deposits,” Koch said. Neekis Hammond, Abrigo’s vice president of sales and professional services, agreed that rate-related topics will continue to shape the commercial banking landscape. “Managing the profitability of loans and deposits in a volatile interest rate environment will be a key focus” for banks and credit unions, he said. Focusing on the Economy, Credit Risk and Allowances Another rate-related issue that managers of credit portfolio risk management will face is economic uncertainty. Still-elevated interest rates are running into declining consumer purchasing power, which stands to add pressure to credit risk. As a result, Abrigo advisors and customers say managing loan portfolio stress will be a top 2025 issue. Financial institutions with high concentrations in specific segments, such as consumer lending and especially commercial real estate (CRE), will need to proactively manage risks through stress testing, early intervention and adjustments to loan loss provisioning. Some Abrigo customers named managing watch-list loans and complying with new stress test reporting as among their institutions’ top priorities this year. 2025 Credit Portfolio Risk and Balance-Sheet Management Outlook By Mary Ellen Biery, Senior Strategist & Content Writer, Abrigo Colorado Banker 16
Expect continued examiner emphasis on concentrations and monitoring. Many examiners’ expectations include more sophisticated stress testing and more information on how lenders are complying with policy limits. Monitoring risk effectively and proactively remains an essential function in 2025. “It is important that banks continue to use sound credit risk management practices such as stress testing at both the portfolio and facility levels, timely and accurate risk ratings, and effective concentration risk management,” the OCC said in its Semiannual Risk Perspective released Dec. 16. “The commercial real estate office sector remains stressed. Risks in multifamily CRE lending remain elevated, particularly in the luxury segment.” Indeed, even with additional interest-rate cuts, challenges in CRE portfolios aren’t going away in the near term, based on customer and advisor comments. CRE loans originated five to seven years ago during the low-rate environment that reprice or mature in the coming year pose risks on two fronts. First, pricing sensitivity among attractive borrowers and heightened loan-pricing competition will increase the risk of losing refinancing deals. Second, lenders have seen an increase in CRE delinquencies, but related charge-offs haven’t yet followed in many cases. Some CRE loan renewals will force a reckoning of the impacts of higher rates and rising vacancies in hard-hit sectors and areas. Banks and credit unions, some of which are experiencing increased past-due loans, will be managing the troubled financial status of some customers, including, in some cases, foreclosures and higher credit losses. Others will reassess their strategies around CRE exposures. Speaking of credit losses, expect increased scrutiny in the months ahead of allowances under CECL, particularly related to model validation and sensitivity to changes in economic forecasts (including prepayment and curtailment rates). Additionally, auditors are under more pressure from the Public Company Accounting Oversight Board (PCAOB) to audit qualitative factors, according to Abrigo’s experts. Financial institutions likely have only seen the beginning of this pain point in 2024 with many smaller banks having year-end audit work in early 2025. Growing Deposits Many of Abrigo’s bank and credit union customers who shared top priorities for 2025 reported plans to grow deposits. Financial institutions will need deposit strategies that can be effective in a dynamic rate environment. Abrigo advisors said institutions especially need to understand the differences in the financial assets and banking habits of their aging deposit base and younger people. Without that understanding, they risk losing out on the generational transfer of wealth between baby boomers and later generations. Competitors are increasing, so knowing which core deposits are sensitive to pricing and having the right products and services will help retain and attract additional depositors. A core deposit study examines the institution’s pricing behavior (the beta and the lag in pricing) and the member or customer’s behavior (the decay) to inform pricing strategies. Mergers and acquisition activity, which has slowed in recent years amid the high interest rates, credit quality concerns and lower bank stock prices, could also be in focus for some financial institutions looking to grow deposits through deals. The recent Fed Funds rate decreases could potentially boost merger activity, according to Abrigo advisors. Abrigo’s purchase accounting and valuation services advisors have completed over 30 buy-side fair value projects since 2023, and they produce a quarterly review of loan portfolio fair value analytics. Efficiently Managing Portfolio and Balance Sheet Risk Given the potential for squeezed net interest margins, it’s unsurprising that lowering non-interest expenses and optimizing institutional processes are also among financial institutions’ top priorities in 2025. Nearly half of customers said their bank or credit union’s goals include efficiency-related efforts or leveraging technology to manage risks and improve efficiency. To be sure, technology plays a vital role in efficiently managing a dynamic interest rate environment. For example, a banking intelligence platform can leverage upcoming loan repricing and maturity information to help understand portfolio trends, risks and market dynamics. Executives can quickly identify the driving forces impacting portfolio credit quality. They can maximize net interest margins using industry-wide data about interest rates for originated loans by type and geography to ensure competitive pricing. Automating the CECL calculation can mean work that takes weeks using spreadsheets can be completed compliantly in half an hour, providing more time for analytical or revenue-producing activities. Streamlining investment accounting and management with automated workflows will help institutions manage fixed-income and liability instruments in the portfolio. A quality asset/liability management model will go beyond regulatory requirements and add strategic value by helping optimize net interest margin, assess risk exposure and develop contingency funding plans while aligning assumptions and reporting with allowance and stress testing. Banking executives will face challenges ahead, especially with interest rate trends expected to come down. Consider accessing banking advisory services for decision support, strategic planning, process outsourcing or guidance on incorporating technology for improved processes. 17 Colorado Banker
ACTSM Deposit Program A SIMPLE SOLUTION FOR IMPROVING YOUR BANK’S CRA RATING By Diane Ellis, Senior Managing Director, IntraFi For many bank executives, meeting the Community Reinvestment Act requirements can feel like solving an intricate puzzle. But a new initiative offers a safe, straightforward solution to one key aspect of CRA compliance. Launched earlier this year by the Community Development Bankers Association (CDBA) and the National Bankers Association (NBA), the Advancing Communities TogetherSM Deposit Program provides banks with a secure and efficient way to fulfill their CRA obligations. By placing deposits into Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs), your bank can earn credit toward the CRA’s community development and investment tests. “The ACT Deposit Program is a promising new tool for community and regional banks to earn CRA credit,” says Brian Blake, CBDA’s chief public policy officer and a former bank CRA officer, “ACT excels at meeting both the spirit and the letter of the CRA, and I believe it is very competitive compared with more complex, costly or time-consuming alternatives.” Colorado Banker 18
How Does the ACT Deposit Program Work? The ACT Deposit Program uses IntraFi’s ICS®, or IntraFi Cash Service®, so your bank’s deposit is eligible for millions of dollars in aggregate FDIC insurance at network banks. The minimum deposit under the program is $1 million for banks with $10 billion or less in assets and $5 million for larger banks. And the deposits earn interest. Note: IntraFi is not an FDIC-insured bank, and deposit insurance covers the failure of an insured bank. A list identifying IntraFi network banks can be found at www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. Regulators define CRA “qualified investments” to include bank deposits with a primary purpose of community development. Under this definition, and subject to considerations such as the asset size and assessment area of the bank seeking CRA credit, deposits placed at CDFI and MDI banks qualify for CRA consideration. While CRA guidelines require CDFIs to be located within a bank’s assessment area to qualify for the credit, deposits into any MDI bank qualify regardless of geographic location. Currently there are 34 MDIs and 64 CDFIs1 operating in 31 states participating in the ACT Deposit Program. You can see a full list of participating CDFIs and MDIs by scanning the QR code. https://www.intrafi.com/act-deposit-program#find-a-bank Brian notes that these deposits will help CDFIs and MDIs do even more to help underserved communities. “ACT program deposits put capital to work in communities that need it most,” he says. “Because CDFI and MDI banks operate in low-income or low-wealth communities, their funding options are limited — but they excel at financing affordable housing and small businesses, creating jobs and expanding neighborhood facilities in low-income communities.” Blake adds that ACT deposits offer banks qualitative benefits when it comes to CRA ratings, since the deposits meet standards of being responsive, flexible and innovative. He concludes that “when leveraged by CDFI and MDI banks, ACT deposits go to very good use.” Learn More about ACT If your bank is looking for a secure, effective way to meet CRA’s community development or investment tests, learn more by emailing Diane Ellis at dellis@intrafi.com or scanning the QR code. https://www.intrafi.com/act-deposit-program#find-a-bank You’ll be doing something smart for your bank while also supplying a CDFI or MDI with much-needed deposits to lend in their markets. 1 Fifteen ACT Deposit Program banks are both CDFIs and MDIs. Deposit placement in the ACT Deposit Program within ICS (“Program”) is subject to the terms, conditions, and disclosures in applicable agreements, including the ACT Addendum to the ICS Deposit Placement Agreement. A portion of a deposit placed in the Program may be allocated to IntraFi network banks that are not CDFIs or MDIs. The interest rate earned on Program deposits will likely be lower than the interest rate available on deposits outside of the Program. IntraFi and ICS are registered service marks, and ACT is a service mark, of IntraFi LLC. Diane Ellis is the senior managing director at IntraFi. She leads the Advancing Communities TogetherSM, or ACTSM, Deposit Program for IntraFi. Previously, she was the director of the Division of Insurance and Research at the Federal Deposit Insurance Corporation (FDIC), where she led efforts to maintain the adequacy of the Deposit Insurance Fund and an effective and fair risk-based premium system, assess economic and financial sector risks to the banking industry, conduct policy-oriented research and analysis for rulemakings, and collect and publish bank financial information and statistics, including the Quarterly Banking Profile. She has extensive executive-level experience in deposit insurance pricing and fund management and was elected twice to serve as an Executive Council member for the International Association of Deposit Insurers. Earlier, she was a senior financial analyst and bank examiner with the FDIC. 19 Colorado Banker
Once you have done it, selling your charged off loans becomes an addiction that you will want to do over and over again! Cherrywood Enterprises Presents Debt selling is something that has been done by thousands of banks, credit unions, auto lenders and commercial lenders over the years. The concept is simple: Take your charged-off loans from the last four years (you know, the accounts that don’t pay or respond to your calls anymore), put them in an Excel spreadsheet and get funds back into your bank within three to five business days. Sounds easy enough, right? Well, that’s up to you. What I can tell you is, the process works! I have been in the charged off debt sales space for over 18 years. I have seen almost every kind of file out there, and I’ve learned that every file is complex. The first question I Debt Selling 101 By Craig M. Geisler, CEO, Cherrywood Enterprises LLC Colorado Banker 20
YOUR DEBT PORTFOLIO MAY NOT BE KEPT IN HERE, BUT IT’S STILL AN ASSET They may not be currency, but debt portfolios which include credit card, auto deficiency, overdraft, judgements or commercial and consumer loans definitely have value. We’ll buy your debt portfolio from the last four years, with minimum sizes of $100k on at least ten accounts and no maximums. We’ll even walk you through the sales process to help with compliance and data integrity. To offload your debt portfolio, contact Craig Geisler at cgeisler@cherrywoodenterprises.com or (321) 247-5066. always get asked is, “How much will you pay me for my charged off loans?” My answer is always the same, “I don’t know, I need more info.” This isn’t a ploy to sidestep the question. It is a legitimate response. I always liken it to saying, “I have a Mercedes for sale, how much will you give me for it?” Surely you would need to know more info, like the year, make, model and mileage — and you would want to take it for a test drive. It’s the same for reviewing a portfolio. We look at many factors like the age, number of times it has been worked, geography, balances and the backup documents to see if we are facing any arbitration language, or language that allows for court fees and attorney’s fees. It takes us roughly three to five business days to review all of that info and then we can come back with what we feel is an aggressive offer for your file. When accepted, we draw up a Purchase and Sale Agreement that includes a Bill of Sale (just like when you sell a car). Once you get the Purchase and Sale Agreement to review, it’s a matter of signing, getting the funds and sending out all of the backup documents. That’s it. Now, you want to know what do you do with the accounts after you have sold them? Most financial institutions cease reporting the accounts on the bureaus and list them as sold and mark them the same within your system. You will never have to speak with that debtor again. It really is a freeing feeling to be able to wash your hands of years of frustration and chasing these debtors with phone calls and letters! Trust me, your cardiologist will notice a large drop in your blood pressure! Once you have done it, selling your charged off loans becomes an addiction that you will want to do over and over again! We will graciously accept your files on a monthly, quarterly, bi-annually or annual basis! Want to know more? Cherrywood Enterprises is here to help you with your questions and give you the answers you will need in order to make an educated decision on whether or not selling your charged off loans is right for your bank. Feel free to call us at (321) 247-5066 or simply email Craig at cgeisler@cherrywoodenterprises.com. You can visit our website at www.cherrywoodenterprises.com as well! 21 Colorado Banker
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==