OVER A CENTURY: BUILDING BETTER BANKS — Helping Coloradans Realize Dreams July/August STABLECOIN: WHAT LIES AHEAD
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©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 Parker Terrell Communications Specialist Megan Carruth Executive Assistant Margie Mellenbruch Bookkeeper* Melanie Layton Lobbyist* Garin Vorthmann 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 12 18 2025-2026 Issue 1 4 CHAIRMAN’S MESSAGE Looking Ahead Together My Priorities for 2025-26 By Brett Wyss, Chairman, CBA 6 Accelerate the Growth of Your Community Bank The First 5 Steps of Your AI Journey By Alec Crawford, Founder and CEO, Artificial Intelligence Risk Inc. 9 Intercreditor Agreements in a Time of Tightening Credit Drafting, Risk Mitigation and Dispute Resolution By George H. Singer, Partner, Holland & Hart LLP 12 New Survey: Fraud May Be Down, but the Stakes for Financial Institutions Remain High By Terri Luttrell, CAMS-Audit, CFCS, Abrigo 14 CBA Centerpoint Going Beyond the Desk to Hear the Stories of Colorado Bankers 16 Stablecoin: What Lies Ahead By Timothy Schenk, General Counsel, Kentucky Bankers Association 18 Enhancing Decision-Making and Financial Reporting Through Model Risk Management By Bryan Johnson, Plante Moran 20 Belief Is the Last Backstop What Easing Bank Capital Rules Really Means for the Treasury Market By Christopher Myers, CEO, B:Side Capital and B:Side Fund 22 Reduce Collateralization A Path to Greater Efficiency and Depositor Satisfaction By Joseph Hooker, Chief Sales Officer, IntraFi 3 Colorado Banker
Looking Ahead Together MY PRIORITIES FOR 2025-26 By Brett Wyss, Chairman, CBA CHAIRMAN’S MESSAGE I’m incredibly honored and excited to serve as chairman of the Colorado Bankers Association (CBA) for the 2025-26 term. Having spent my career in banking, I’ve come to truly value the power of community, collaboration and the role CBA plays in supporting all of us — not just as professionals, but as neighbors and partners in Colorado’s growth. As I step into this role, I’ve been reflecting on what matters most for our industry right now — and where we need to go next. With that in mind, I’d like to share four priorities that I believe will help strengthen our collective impact in the year ahead. 1. Keep Advocacy Strong and Focused At its core, CBA has always been an advocate — for our banks, for our teams and for the communities we serve. That’s not changing. If anything, we’re doubling down. With Jen and Allison leading the charge, we have a team that understands the issues and knows how to build relationships that get results. Whether it’s protecting our ability to compete, keeping regulations fair and workable, or helping shape the policies that affect us every day, our voices matter. And I’m committed to making sure it’s heard loud and clear, at both the state and federal levels. 2. Invest Even More in Education One of the things I’ve always appreciated about CBA is its commitment to helping bankers grow. It’s something we do really well — and I want us to do even more. From compliance and lending to leadership and innovation, we’ll continue offering educational opportunities that are timely, practical and high-quality. Whether you’re just starting your career or stepping into a senior role, we want to meet you where you are and help you get where you’re going. 3. Protect the Financial Strength of CBA CBA has been around for over a century for a reason — we’re built to last. Part of that comes down to good financial stewardship. I believe it’s critical that we continue to maintain the strong financial footing that allows us to be flexible, proactive and ready to respond when the unexpected happens. That financial strength is what lets us serve you better — plain and simple. 4. Grow and Engage Our Membership This one is personal for me. I truly believe that the more connected we are, the stronger we are. That’s why one of my top priorities is to bring more banks into the fold and deepen our relationships with existing members. It doesn’t matter if you’re a small community bank or a large institution — every voice matters, and every perspective strengthens our collective work. My goal is to make sure every member feels seen, supported and empowered to be part of the conversation. To me, this is what leadership is all about — listening, learning and leaning in together. I’m grateful for the opportunity to serve as your chairman and to help guide CBA through another year of progress and purpose. Thanks for the trust you’ve placed in me. I’m looking forward to what we’ll accomplish together. Colorado Banker 4
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Accelerate the Growth of Your Community Bank THE FIRST 5 STEPS OF YOUR AI JOURNEY By Alec Crawford, Founder and CEO, Artificial Intelligence Risk Inc. These are exciting times for community banks. Artificial intelligence (AI) can now level the playing field between you and the banking behemoths with tens of thousands of employees. You may be asking how you can leverage AI for growth and not become one of the almost 2,000 U.S. banks that were merged away in the last decade. As the graph above highlights and Jamie Dimon, chairman and CEO of JP Morgan, said best: “AI is a race you do not want to lose.” Shifting to an AI-centric strategy will define the winners and losers, not just in banking, but across every sector in the next few years. Step 1: AI for Team Efficiency In the interest of efficiency, I am not going to spend a lot of time on AI. You see it everywhere. You can earn back every dollar you spend on AI and more with efficiency gains for your current staff. Transcribing meetings, writing emails and even writing marketing materials with AI are already Courtesy of McKinsey & Company Colorado Banker 6
happening at your bank — whether you know it or not. Embrace these efficiency gains as something you can do quickly and easily with AI. One piece of advice is to avoid singular AI “apps.” If all the AI app does is one thing, look somewhere else for an AI platform that will do many things. My second piece of advice is to avoid SaaS and do this securely inside your firewall with your own private AI. Step 2: AI to Find and Attract New Bank Clients The main reason you are not gathering new clients and assets is that they have barely heard from you and thus do not know how you can help them. How do you get your message out there to the right potential clients? Advertising is expensive, especially if it is to people who will never be your customers. Gathering new clients is difficult and often an afterthought in a busy day’s work. You can automate a lot of the process with AI, target the right audience and increase your inbound calls. • “Influence the influencers.” Use AI to figure out where your potential clients are seeking advice. Engage them. • Identify potential local customers using AI to examine social media and your existing methods. Who are the local business owners? Who owns property in your town? How do you reach first-time home buyers? • Craft targeted marketing campaigns using AI for your different business lines — mortgage lending, commercial lending and deposits. • AI chatbots and lead-generation tools on your website can capture and qualify new leads 24/7. • Personalize marketing campaigns based on digital behavior, financial needs and location. Step 3: Elevating Client Experiences Through AI The next generation of banking clients may not want to stop by your branch so often. They want to bank on their phone. This tendency is an advantage and a disadvantage for community banks, depending on how you are positioned for this shift. In order to service those clients — and more and more of them in years to come — you need a digital strategy, a mobile-first digital strategy that relies on AI. • Expand your business beyond your location — become a digital bank. • AI chatbots and virtual assistants can resolve common issues 24/7. • Sentiment analysis on customer interactions can flag frustration before it escalates. • A digital knowledge center for your human call center team can dramatically increase their accuracy and productivity. • Offer digital financial wellness tools powered by AI to deepen trust and engagement. Step 4: Start and Expand Your Wealth Management Business with AI I really like seeing the same tellers every week at the bank. Nevertheless, I don’t really mind which teller I end up with. The same is not true for my financial advisor and the wealth management business. I want a consistent experience, the same person, and I want someone who really knows what they are doing — my retirement is in their hands. With the right people, process and software, a community bank can go from nothing in wealth management to hundreds of millions of dollars in a decade. That is a game changer for a community bank. There are over 300,000 financial advisors in the U.S., and you only need a few to dramatically grow — if you use AI correctly. • Use AI to identify depositors or borrowers who are financially ready for investment conversations. Target the largest generational wealth transfer in U.S. history as baby boomers pass on their wealth. • Using AI for efficiency can potentially double the number of households that one advisor can handle: automated pre-meeting summaries, client updates, meeting transcripts, follow-ups and next best actions. 7 Colorado Banker
• Leverage AI and use client communication platforms that are smartphone-based to lock in clients and streamline secure customer interactions. • Use AI to screen for problems and opportunities across client portfolios — see around corners so your financial advisors do not need to. Step 5: Strategy Is AI and AI Is Strategy What was bank strategy just a few years ago? Control costs? Try to gather assets? Acquire or be acquired? Soon, strategy is AI and AI is strategy. AI can control costs, gather assets and perhaps make your bank the acquirer instead of the acquired ... • AI can control costs in myriad ways. • As previously mentioned, AI can help gather assets more efficiently. • AI can not only be part of your strategy, but it can also help guide your strategy. It’s that good now. • You need a 24/7 strategy and AI is the answer: cybersecurity, customer service and fraud monitoring. Safety and Security First Before I talk about implementation, I will talk about safety and security first. Management, the board of your bank, and especially the risk and compliance committee will want to make sure anything you do with AI will not put the bank at risk, from a regulatory, reputational or stakeholder standpoint. To do this right, you need four pillars: governance, risk, compliance and cybersecurity. The term I have coined goes beyond AI trust and safety: AI GRCC. • Governance determines what core and other data the AI can use, what AI is and is not allowed to do, what AI models can be used, and who at your bank can do what with AI. Actively choose these items; do not let them happen to you. No governance means AI can read the CEO’s emails. That would not be good. • Risk management focuses controlling both the novel risks of AI, like the AI providing wrong answers or spouting toxic language, as well as existing risk management tools applied to AI — encrypting everything in motion and at rest, as well as sensitive data before it goes to AI, like personal or personal health information. • Compliance will go from easy to hard over the next few years as the regulators catch up with the technology. Right now, it is imperative to align with existing compliance rules for AI and learn how “model risk management” applies. I strongly suggest following the NIST AI Risk Management Framework as well. That guideline is currently acting as a “safe harbor” from upcoming AI rules in certain states, such as Colorado. • Cybersecurity is going to get tougher with the adoption of AI — by the bad guys. You will need to fight AI with AI, or you will lose the battle. While many banks are already screening emails with AI tools for malicious intent, the newer, more complex task is spotting attacks on AI itself, to prevent manipulation of the AI or data exfiltration. Implementation Of course, everything previously stated is nice, but without a team of AI experts like the largest banks have at their disposal, this sounds difficult. Buying a few AI “apps” or using SaaS tools probably only covers a couple of the bases. I recommend private cloud deployment of private AI and tools, surrounded by the AI GRCC layer just described. Buy it, don’t build it. Customization Every bank is different. If you think you can take a copilot built for any company in the world out of the box and have it solve your problems, it will not. While an AI GRCC layer and a number of bank-specific AI tools are a great starting point, you will almost certainly need help and customization across a number of areas: • Data needs to be connected to your AI: core data, your CRM, other APIs and databases. • Agents, or custom AI tools, need to be created that align with what your bank’s processes need. • Workflows combined with agentic AI will change the world — doing the repetitive work that AI is great at, and humans find boring. Mark Twain said, “The secret of getting ahead is getting started.” Start your AI journey soon. It is easy to be paralyzed with “where do we start” or “we need to fix ______ first.” Don’t be. You can start using AI anytime, no matter the shape of your technology stack. In my opinion, it is more important to bring your people along than to get your IT ready. Of course, I could be wrong. Maybe AI is a fad (like the internet was). Colorado Banker 8
Intercreditor Agreements in a Time of Tightening Credit DRAFTING, RISK MITIGATION AND DISPUTE RESOLUTION By George H. Singer, Partner, Holland & Hart LLP As credit markets tighten and capital structures grow more complex, intercreditor agreements (ICAs) have assumed an increasingly critical role in commercial finance. These agreements — defining the relative rights, priorities and risks among lenders who share a common borrower or collateral pool — can significantly influence outcomes in both performing loans and distressed scenarios. In today’s environment, where senior lenders are demanding greater protections and mezzanine or subordinate creditors are under increasing pressure, understanding the importance of issues relating to drafting, negotiating and enforcing ICAs is essential for sound credit practice and risk mitigation. This article outlines key considerations for navigating ICAs in a shifting market landscape, with a focus on drafting considerations, risk allocation, enforcement mechanisms and common sources of conflict. By appreciating the evolving dynamics between senior and subordinate lenders, bankers and legal professionals can better position themselves to mitigate risk and resolve disputes efficiently — whether at the outset of a deal or later in a scenario that involves distress. The Function and Structure of Intercreditor Agreements At their core, ICAs are contracts between two or more classes of creditors who have extended financing to the same borrower. These agreements define the relative rights, remedies and priorities among secured creditors — most often between senior and subordinated lenders — and are instrumental in managing the risks that arise from multi-tiered capital structures. A well-drafted ICA serves as a private ordering mechanism: It contractually limits the actions that junior creditors can take, thereby reducing uncertainty, curbing inter-lender litigation and promoting orderly enforcement. These agreements are particularly consequential when the borrower becomes insolvent, where the tensions due to competing interests between creditor classes are often magnified. In the context of bankruptcy, ICAs often restrict the extent to which subordinated creditors can participate in the case. These agreements typically prohibit junior creditors from contesting senior liens and debt, objecting to debtor-in-possession (DIP) financing, opposing asset sales favored by the senior lender, supporting a plan of reorganization not favored by the senior lender or even voting on a plan altogether. ICAs reflect a calculated trade-off: In exchange for predictability and reduced enforcement costs, subordinated creditors agree to cede substantial control to senior lenders, particularly in times of default. These contracts, often negotiated between sophisticated parties, streamline enforcement and reduce bargaining costs when defaults or bankruptcies occur — primarily by limiting the participation rights and remedies available to subordinated creditors. At the same time, they often give senior lenders significant control over the borrower’s fate, both in and out of bankruptcy, raising questions about fairness, leverage and strategic behavior in distressed situations.1 9 Colorado Banker
Core Provisions in Intercreditor Agreement A typical ICA addresses the following key issues: • Establishment of Relative Priority: Specifying the ranking of liens among creditors and setting the expectations for lien perfection to ensure enforceability and clarity of priority. • Payment Subordination and Waterfall: Establishing the order and timing of payments, ensuring senior creditors are paid first before junior creditors receive any distribution. • Exercise of Remedies: Dictating how and when junior creditors may enforce their rights and access collateral — often requiring the passage of a standstill period or senior lender consent. • Collateral Proceeds: Detailing how proceeds from collateral sales or recoveries are distributed among creditor classes. • Turnover Obligations: Requiring junior creditors to turn over proceeds received in violation of the specified priority scheme to the senior lender. • Voting and Consent Rights: Allocating decision-making authority among creditors, including rights to approve amendments, waivers and enforcement decisions. • Bankruptcy Participation: Defining the rights and limitations on creditor actions during a borrower’s insolvency proceeding, including restrictions on voting, adequate protection, financings, bankruptcy sales and plan treatment.2 These common provisions can provide senior creditors with influence that exceeds their economic stake the borrower’s capital structure, often to the detriment of creditors who are not party to the ICA. Why Intercreditor Agreements Matter More Today As capital structures grow more complex and constrained credit availability becomes the new norm, ICAs have become central to lender coordination and recovery outcomes. Recent distressed activity and litigation have increased the stakes. Lender-on-lender litigation has underscored this reality.3 Lenders, borrowers and legal professionals must now approach these agreements not as mere boilerplate to be addressed as a final step to a loan closing, but as critical instruments of credit protection, enforcement strategy and litigation risk management. Notable Court Rulings Over the past several decades, the enforcement of ICAs has taken on increasing significance in bankruptcy proceedings. While the Bankruptcy Code provides that “subordination agreements” are enforceable in bankruptcy to the same extent such agreements are enforceable under applicable non-bankruptcy law (see 11 U.S.C. § 510(a)), disputes among creditors frequently arise as junior lenders often seek to participate and protect value. Courts have not been entirely consistent in their treatment of these agreements, and outcomes often turn on the specific language of the ICA. As a result, case law continues to evolve, shaping creditor expectations and strategies in both distressed and non-distressed lending environments. 1. In re Boston Generating, LLC, 440 B.R. 302 (Bankr. S.D.N.Y. 2010): Issue: Whether a second-lien lender could object to bankruptcy sale under § 363 even though the ICA contained a waiver of such rights. Ruling: The bankruptcy court enforced the ICA and the waiver and barred the junior lender from objecting to the proposed sale. Lesson: The court reinforced that clear and express waivers in an ICA will generally be upheld as a matter of contract in bankruptcy, especially in sophisticated lending transactions.4 2. In re MPM Silicones, LLC (Momentive), 2014 WL 4436335 (Bankr. S.D.N.Y. 2014): Issue: Whether a loosely-worded lien subordination clause could bar junior lienholders from objecting to confirmation of a plan. Ruling: The court narrowly interpreted the ICA and held that vague drafting fails to silence junior lienholders and eliminate their standing; to enforce a “silent second,” ICAs must use precise, restrictive language. Lesson: Courts may limit the scope of ICA waivers in favor of bankruptcy’s policy of creditor participation unless the language is unambiguous.5 3. In re Tribune Co., 472 B.R. 223 (Bankr. D. Del 2012): Issue: Whether restrictions in an ICA that impact a junior creditor’s right to vote on a plan of reorganization be enforced. Ruling: The bankruptcy court found that bankruptcy law and policy does not override a right granted by Congress in the Bankruptcy Code to creditors to vote their claims. Lesson: The Bankruptcy Code’s enforcement of subordination agreements does not permit a court to authorize a junior creditor’s disenfranchisement and voice in all cases. 4. In re NESV Ice, LLC, 661 B.R. 427 (Bankr. D. Mass. 2024): Issue: Whether senior lender, as an assignee, could exercise voting rights of a junior creditor based upon prepetition ICA in bankruptcy. Ruling: Enforceable only if used in good faith; using claims strictly for litigation strategy would subvert the bankruptcy. Lesson: Assignments of voting rights in ICAs generally cannot override the right of a creditor to vote on a Chapter 11 plan as guaranteed by the Bankruptcy Code. Similarly, assignment of voting rights to a senior lender have been found by courts to be unenforceable because subordination agreements address payments — not voting. 6 Colorado Banker 10
5. Del. Trust Co. v. Wilmington Trust, N.A. (In re Energy Future Holdings Corp.), 546 B.R. 566 (Bankr. D. Del. 2016): Issue: Whether amounts received by junior lenders were required to be turned over under ICA as “proceeds of collateral.” Ruling: Adequate protection and plan payments were designed to protect creditors from diminution in value of their collateral and were not required to be turned over to senior lender. Lesson: Courts will strictly enforce the express provisions of ICAs in favor of the subordinated creditor and against the senior creditor seeking payment priority, particularly when the payment is not attributable to proceeds of collateral. The parties’ intent must be clearly manifested and consistent in the ICA. Bottom Line Courts repeatedly remind bankers and other deal-makers — vague clauses in ICAs will not withstand scrutiny. If you want to silence junior lienholders, draft “silent second” provisions with crystal-clear, specific wording. These agreements must be drafted (and they are interpreted by courts) with exacting precision — particularly when attempting to limit junior rights in the event of financial distress or bankruptcy. Courts will protect statutory voting rights afforded by the Bankruptcy Code and reject broad language that attempts to silence junior creditors without precise drafting. Facing Distress: Practical Steps for Lenders 1. Due Diligence: Verify existing intercreditor terms before joining complex capital stacks and understand implications for distress and bankruptcy. 2. Understand Consequences: ICAs simply can not be relegated in mind or in practice as ancillary loan documents. It is imperative that bankers and counsel appreciate the significance of these agreements at the front end of any transaction. 3. Inter-Creditor Review: Review existing ICAs for ambiguities or enforcement gaps. Understand how “silent” the “silent-second” lien is under the ICA. 4. Crisis Coordination: In a restructuring, align credit and legal teams to interpret and enforce terms. A senior lender has two primary remedies in the event of a breach by a junior lender under an ICA: (i) seeking judicial involvement, typically in a bankruptcy case compelling enforcement and enjoining prohibited conduct; and (ii) addressing the consequences of breach of contract. 5. Update Templates: Reflect on the lessons from case law in standard documentation. 6. Consider Exit and Dispute Resolution Mechanisms: Include termination, buy-out provisions and pay-down triggers. Consider choice of law, venue and other dispute resolution issues on the front end of any transaction — it is often “boilerplate” … until it’s not. Conclusion As volatility rises in credit markets, well-formulated ICAs become critical defense mechanisms for lender portfolios. The importance of clearly drafted, well-negotiated ICAs cannot be overstated, particularly as credit tightens and market uncertainty grows. These agreements not only guide creditor conduct in distress scenarios but also serve as critical tools for anticipating and managing conflict. Legal and finance professionals must approach them with a sharp understanding of both their strategic implications and their practical enforceability in bankruptcy and beyond. George Singer is a partner in the Denver office of Holland & Hart LLP. His practice emphasizes corporate finance and credit transactions, with a particular focus on structuring complex financings, bankruptcy and financial restructurings. He is a Fellow of the American College of Bankruptcy and routinely addresses intercreditor agreements and issues as part of his practice. George can be reached at ghsinger@hollandhart.com. 1It is not unusual for contractually subordinated creditors to find themselves in a more restricted position than general unsecured creditors in a bankruptcy case. Under many ICAs, junior lenders waive rights that unsecured creditors would ordinarily retain. As a result, subordinated creditors may be bound to silence in key aspects of a bankruptcy case, even as general unsecured creditors retain a voice. Courts often enforce these waivers as a contractual matter, highlighting the critical need for careful negotiation and drafting at the front end of a transaction. 2George H. Singer, The Lender’s Guide to Second-Lien Financing, 125 THE BANKING L.J. (March 2008). 3See, e.g., Wilmington Trust N.A. v. Alter Domus (US) LLC (In re Franchise Group Inc.), 1:24-bk-12480, Dkt. Nos. 192, 274, and 466-69 (Bankr. D. Del. 2025) (first-lien and second-lien lender disputes resulting in bankruptcy litigation addressing scope of ICA and senior lender’s contentions that junior creditor was exercising “enforcement action” in violation of ICA by taking positions adverse to senior lender). 4Accord In re Ion Media Networks, Inc., 419 B.R. 585 (Bankr. S.D.N.Y. 2009) (strictly enforcing broad waiver provision, barring junior lender from object to senior lender’s claims or plan treatment); BOKF, N.A. v. JP Morgan Chase Bank, N.A., 2022 WL 955891 (Del. Ch. Ct. March 30, 2022) (emphasizing strict interpretation of ICA that clearly subordinated junior rights). Contra In re RadioShack Corp., BKY Case No. 15-10197 (Bankr. D. Del. 2015) (finding that ICA will not be read to contain implicit waivers; drafting silence construed against the party seeking enforcement). 5In re Bost Generating, LLC, 440 B.R. 302, 316 (Bankr. S.D.N.Y. 2010) (narrowly construing ICA to permit participation by junior lenders not “engaging in . . . obstructionist behavior.”) 6See, e.g., In re Fencepost Prods., Inc., 621 B.R. 289 (Bankr. D. Kan. 2021). 11 Colorado Banker
New Survey: Fraud May Be Down, Fraud isn’t only a risk to manage within financial institutions; it’s quickly becoming one of the most critical tests of trust between banks and their clients. As fraud continues to be a climbing concern at reported losses of $12.5 billion in 2024, consumer expectations for their financial institutions remain high. Abrigo recently conducted its second annual fraud survey to understand how fraud affects U.S. consumers and small businesses and what they expect from their financial institutions. The 2024 Abrigo State of Fraud report uncovered how prevalent fraud had become. Fast forward to 2025, and the picture has changed, but in ways that are just as concerning. According to the Abrigo State of Fraud report 2025, fewer people have experienced fraud this year, but the anxiety around it has grown, and so has the emotional fallout when it does happen. Here’s a closer look at how the numbers have changed and what those shifts might mean for your bank. Fraud Is Less Frequent, but the Pressure Is Rising In 2024, nearly half of the participants told us they had experienced financial fraud at some point. In 2025, the percentage of people who had experienced fraud dropped to 38%. That’s encouraging on the surface, but it doesn’t tell the whole story. Concern about fraud hasn’t dropped. In fact, it’s rising, particularly regarding new threats like AI-driven scams and identity theft. Even with fewer incidents, 56% of fraud victims still reported stress or anxiety, and more than 60% said they would reduce their relationship with their bank or credit union if they were defrauded. Customer attrition rates held steady, with about one in five respondents reporting they had left a financial institution due to fraud, regardless of fault. This underscores the growing pressure on institutions to respond swiftly and effectively to protect both reputation and retention. Customers Are Worried About — and Open To — AI Artificial intelligence has quickly become both a red flag and a green light for consumers. In 2024, 74% of respondents feared AI would increase successful fraud. In 2025, that number jumped to over 83%. But here’s the twist: While concern about AI is rising, so is trust in how it can be used to prevent fraud. This year, 44% of consumers and an impressive 69% of small business owners state that they would feel safer if their institution used AI-powered fraud detection. People are beginning to accept that fraudsters are using advanced tools, and they want their banks to fight back with equally sophisticated defenses. Transparency is key. Clients want to know what tools are being used to protect them and how those tools make a difference. Small Businesses Are Feeling the Pressure If you’re serving small businesses, the survey’s insights into how they’re being affected by fraud matter. Last year, half of small business owners had been targeted by fraud. This year, it jumped to nearly 60%. The reported fraud is not minor. More business owners are encountering check fraud and AI-assisted scams. Many of them are facing losses of over $10,000, and they’re spending hours, sometimes days, to resolve the issue. Small businesses also reported that they are more likely to walk away from a banking relationship if they feel unprotected. In this year’s survey, 30% of small businesses said they had ended a banking relationship due to a fraud event. That’s a loud and clear signal; this segment expects tailored fraud education, proactive tools and quick response when things go wrong. By Terri Luttrell, CAMS-Audit, CFCS, Abrigo Colorado Banker 12
Check Fraud Isn’t Going Anywhere, Even as Check Usage Decreases It might be surprising, but check fraud continues to be one of the most persistent and damaging types of fraud we see, even as fewer people write checks. Total check fraud losses for 2024 are estimated to exceed $24 billion. In 2024, 61% of people said they still wrote or received checks. In 2025, that number dipped only slightly. Yet, nearly half of all respondents weren’t aware that mail theft is a key driver of check fraud. Even fewer knew that using a gel pen could help prevent check washing. Younger consumers showed higher-than-expected rates of check fraud victimization, possibly because they didn’t realize the risks. Small business owners continue to rely on checks more than most and face even greater exposure as a result. Education and real-time check fraud detection are important ways to strengthen the relationship between a financial institution and its customers. This is a chance for banks and credit unions to be seen as trusted advisors by offering clear guidance and solid monitoring tools. For example, advising customers not to mail checks from their home mailbox and to use in-branch drop boxes or digital payments instead can go a long way in preventing fraud. Pair that with real-time alerts for suspicious check activity, and you’re not only helping protect your customers, you’re also protecting your bottom line. Trust Still Breaks Down After Fraud One of the most consistent findings from the survey both years is this: people don’t always stay in a banking relationship, even when their financial institution resolves the fraud quickly. In 2024 and 2025 alike, nearly one in five respondents said they had switched banks or credit unions because of a fraud incident. Many more said they would reduce engagement even if they were satisfied with the resolution. It’s not just about how fast you fix the issue; it’s about how supported, informed and secure your customers feel throughout the process. That’s where communication makes all the difference. Whether it’s sending fraud alerts through the customer’s preferred channel or educating them on what to do next, consistent, clear messaging builds trust that lasts beyond the crisis. What Does All of This Mean for Your Institution What should financial institutions take from the shift in numbers between 2024 and 2025? Fraud isn’t just a technical problem; it’s a human one. People want to feel financially secure, and they want to understand how you’re helping them stay that way. They want you to be transparent about how you’re fighting fraud, especially when it comes to new technologies. When a client is a small business owner, they want tailored support that acknowledges the size of the risks they face. Institutions that respond with empathy, innovation and clear communication will not only reduce fraud losses but also strengthen client relationships. Final Thoughts: Turning Insight Into Action The year-over-year changes in Abrigo’s fraud surveys show us that while fraudsters’ tactics may evolve, your client’s expectations remain steady. They want to be protected, informed and know you have their back. For community banks and credit unions, this is more than a call to action. It is a chance to differentiate. The financial institutions that respond with smart fraud tools, transparent education and empathetic communication will not only reduce losses but also build the kind of trust that fuels long-term relationships, customer loyalty and community growth. Your fraud strategy should reflect your institution’s values, resilience and commitment to protecting what matters most. but the Stakes for Financial Institutions Remain High 13 Colorado Banker
Maria Miller Vice President Business Banker American Bank of Commerce How did you get started in the banking industry? I completed a high school course in partnership with a local credit union, which introduced me to the banking industry. After high school, I decided to work for a regional bank instead of pursuing higher education. This was 30 years ago. I spent many years in retail banking, gaining valuable knowledge from various mentors. Their support encouraged me to return to school and earn a business degree while continuing my role in retail banking. In 2011, I started working at a community bank, where I was introduced to commercial banking, marking an important milestone in my career. Since then, I have gained experience in treasury management, commercial loan support and portfolio management. I am proud of my professional journey so far, as these roles have been key to my growth and have improved my skills as a banker. What are you most proud of in your professional life so far? In hindsight, I started banking at a young age without professional experience. I had to work harder to gain my peers’ respect and overcome many hurdles to be taken seriously. This lasted for many years, especially as I began to take on roles with more responsibilities. I stayed focused because I knew what I wanted and was determined. This helped me develop a strong work ethic rather than grow resentment. I had to make a choice, and the choice I made has served me well. However, I didn’t do this alone. I can think of three people in my career who believed in me and took a chance on me, and I will be forever grateful to them. What is the most important thing you’ve learned from a career in banking? Banking has taught me many lessons: Never stop learning, be adaptable, act with integrity, stay resilient, maintain discipline and stay goal-oriented. I once had a manager advise me not to compromise my values. It takes years to build your reputation, but only one decision to ruin it. I keep this in mind in all my interactions. Be genuine. People can see when you’re not. What is your favorite movie or book, and why? I don’t have a particular favorite movie or book, but I enjoy stories based on real events or documentaries. There are many lessons to learn from others, whether it’s about what to do or what to avoid. CBA Centerpoint Vinaya Williams Retail Relationship Banker BMO Bank How did you get started in the banking industry? The BankWork$ program through the Colorado Bankers Association was my first glimpse into the banking industry, and it turned out to be a phenomenal starting point. I learned not just from the curriculum but also from my peers, the instructors and the industry professionals. My impression of each of them was that this career path was doable, welcoming and rewarding. What makes your bank unique? There are two things I really love about BMO Bank, that I think make it unique: our genuine focus on relationships and the emphasis on attracting and retaining top talent. The underlying theme is that BMO Bank invests in people, whether that’s hearing a client and understanding their unique needs, or celebrating employees and making them feel seen and heard. It also shows up in the company’s commitment to community. Not only does the company commit dollars and volunteer hours to local nonprofits, but employees are encouraged to volunteer and serve on boards to give back to the community. What do you like to do to give back to the community? I am passionate about forming connections. Sometimes that’s in the form of mentorship and sometimes it’s just facilitating connections between people I know could benefit from one another’s insight and influence. I’m also active with the Downtown Boulder Partnership and the Boulder Area Rental Housing Association and GOING BEYOND THE DESK TO HEAR THE STORIES OF COLORADO BANKERS Colorado Banker 14
BankWork$: Launching Banking Careers in Colorado Banking offers more than just a job — it offers a career with stability, benefits and room to grow. In Colorado, aspiring professionals can now access BankWork$, a free 8-week job training program designed to launch careers in the banking industry. Offered through a partnership between Goodwill of Colorado and CareerWorks, BankWork$ prepares participants for entry-level roles as tellers, customer service associates and personal bankers. The curriculum covers essential banking topics like digital platforms, federal regulations, loans, fraud prevention and business ethics — along with resume prep and interview coaching. Each program ends with a hiring event, connecting graduates directly with bank partners ready to hire. For Coloradans looking to start a stable and rewarding career in banking, BankWork$ is a proven first step — and it’s completely free. Colorado Bankers Association is a proud supporter of BankWork$. For more information, contact Kelly Hargrove at (303) 386-2936 or khargrove@goodwillcolorado.org. take any opportunity I can to help champion financial education. What do you geek out about? I geek about leadership models, their impact and influence, and about organizational structures and workplace intelligence. Who is one of the most influential figures in your life? I can’t narrow it down to just one, but the top of the list would be Lady Diana, Princess of Wales, His Holiness the Dalai Lama and Mother Teresa. I’ve also found the philosophies of the Outward Bound schools to be very influential and impactful in my life. 15 Colorado Banker
If you watch or read the news, stablecoin is featured nearly daily in the headlines. Some sing its praises, others say it is the end of community banking. But most, if they’re being honest, don’t really know a lot about stablecoin. That shouldn’t be a surprise, considering how much has changed since stablecoin’s initial introduction. Investopedia defines stablecoin as “cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity or financial instrument.” We now know that the value to which stablecoin is “pegged” is the United States dollar. We have also seen the GENIUS Act (S. 1582) signed into law with the intent of creating a regulatory framework to manage stablecoin. The GENIUS Act itself is 48 pages; a little too long to talk about in detail in this article, but let’s look at the broader points before tackling some of the more narrow concerns. Congress.gov summarizes the GENIUS Act as, “Under the bill, only permitted issuers may issue a payment stablecoin for use by U.S. persons, subject to certain exceptions and safe harbors. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified non-bank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. “Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less. “Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves. “The bill specifies requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination and enforcement authority over federal-qualified issuers. “The bill allows foreign issuers of stablecoins to offer, sell or make available in the United States stablecoins using digital asset service providers, subject to requirements, including a determination by the Department of the Treasury that they are subject to comparable foreign regulations. “Under the bill, permitted payment stablecoins are not considered securities under securities law. However, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.” In short, stablecoin is here, and there are now some rules as to how it is to be treated under the law. However, in reading the GENIUS Act, my concern goes to the rarely discussed Section 11 regarding the treatment of stablecoin insolvency proceedings. It states: (a) IN GENERAL. — Subject to section 507(e) of title 11, United States Code, as added by subsection (d), in any insolvency proceeding of a permitted payment stablecoin issuer under Federal or State law, including any proceeding under that title and any insolvency proceeding administered by a State payment stablecoin regulator with respect to a permitted payment stablecoin issuer — (1) the claim of a person holding payment stablecoins issued by the permitted payment stablecoin issuer shall have priority, on a ratable basis with the claims of other persons holding such payment stablecoins, over the claims of the permitted payment stablecoin issuer and any other holder of claims against the permitted payment stablecoin issuer, with respect to required payment stablecoin reserves; (2) notwithstanding any other provision of law, including the definition of ‘‘claim” under section 101(5) of title 11, United Stablecoin: What Lies Ahead By Timothy Schenk, General Counsel, Kentucky Bankers Association Colorado Banker 16
States Code, any person holding a payment stablecoin issued by the permitted payment stablecoin issuer shall be deemed to hold a claim; and 11 (3) the priority under paragraph (1) shall not apply to claims other than those arising directly from the holding of payment stablecoins. In short, my reading of Section 11 means stablecoins have a super-priority lien in bankruptcy. The international law firm, Morgan Lewis, put it more succinctly in stating, “Section 11(a) of the Act establishes a general rule that the claims of holders of payment stablecoins to the reserves backing the stablecoins have priority over all other claims in the bankruptcy case. The general rule reinforces a stablecoin holder’s redemption right as creating a ‘hard promise’ by the permitted stablecoin issuer to redeem the holder’s payment stablecoins for fiat currency at the election of the stablecoin holder. The effect of the general rule is to give to the stablecoin holders what is tantamount to a security interest in the reserves to secure the permitted stablecoin issuer’s redemption obligations to the stablecoin holders. “However, the stablecoin holders are actually treated more favorably than secured creditors in a bankruptcy case. There is no possibility for the debtor issuer under Section 364 of the Bankruptcy Code to obtain credit based on the reserves even if the stablecoin holders are otherwise adequately protected. Not only is the debtor issuer prohibited from granting a security interest in the reserves under Section 4(a)(2) of the proposed Act, but also, under Section 11(e)(3) of the proposed Act, the reserves are not considered even to be included in the debtor issuer’s bankruptcy estate.” I have not practiced in bankruptcy court for some time, but my reading of Section 11 leads me to believe that being a stablecoin holder leaves you in a better position than any creditor in any form of insolvency. Why does that matter? In my opinion, if these provisions are not amended, astute depositors will recognize the super-priority position of stablecoin and move traditional cash deposits to stablecoin. That creates a real problem. The question leading the title of this article is What Lies Ahead? I do not know the answer to that, but I am concerned that if these sections are not amended, it could have serious negative effects on the banking ecosystem. In order to control What Lies Ahead, we must have Section 11 amended to ensure that traditional deposits and security interests are protected. If you find this as concerning as I do, I encourage talking to your legislators about these issues. Your voice matters. 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. 17 Colorado Banker
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