DENVER (KOAA) — A group of lawmakers is putting forth proposed legislation that would allow credit unions, a piece of legislation that isn't getting a lot of media coverage but could have a major impact.
SB25-080 is titled "Allow Credit Union to Purchase Bank Assets." News5 spoke to one of the sponsors of the bill, Republican Senator Scott Bright, ahead of a scheduled Finance committee hearing on Tuesday at 2 p.m. Credit unions are not-for-profit and member-owned while banks are for-profit and owned by shareholders. Colorado is one of a handful of states that don't allow credit unions to buy state banks and their assets.
"At the end of the day, they're both businesses," Sen. Bright said of both banks and credit unions. "If I was a bank and I competed against credit unions throughout the career that I had, throughout that business career, I might feel that maybe the playing field is not quite fair, not quite level... when I want to sell my business, I would want to make sure that there were as many people at the table to put together competing offers as possible."
Sen. Bright is against the amount of government control on this topic in the Centennial State.
"I think the government should probably step out of the way when it comes to a willing buyer and a willing seller transacting a legal product or legal good or service the bank," Sen. Bright added. " The government should probably step back from that transaction."
If approved, credit unions would be allowed to buy up to five banks each year, but the sale must be approved by both the bank's and credit union's governing boards and the banking board.
This isn't the first time the notion has been put forward at the legislature, a similar measure failed last session. The Colorado Bankers Association had 474 Colorado bankers sign a letter asking lawmakers to vote no on SB25-080.
"Colorado’s state-chartered banks play a vital role in the economic health of our state, supporting local businesses, agriculture, and families," a statement from Jen Waller there President and CEO of the Colorado Bankers Association shared in a statement with News5. "It’s important to ensure any changes to our financial system support fair competition and long-term stability. We encourage policymakers to carefully evaluate SB25-080 and its potential impacts on Colorado’s financial future."
A study by the Common Sense Institute states that if passed, Colorado could miss out on money from tax-paying banks. You can read the study by clicking here.
"Assuming half of potential deals through 2034 involve a credit union purchase of a state-chartered community bank, the present value of reduced corporate income tax revenue to the state is $16.0 million," part of the study reads.
The study compares the potential loss of income tax revenue over 10 years to the salary of about 233 teachers.
Watch What The Bill Could Mean For You In The Video Player Below.
Sen. Bright believes allowing banks to sell to credit unions could greatly benefit the seller and the community the bank is located in.
"The bank wants to sell for a particular reason," Sen. Bright added. "The bank needs to get out of that business, in that environment, in that town, in that area... And so I feel like, with credit union coming to the table with a legitimate offer, we're preserving that banking environment for that town. So, you know, the banks got to have a reason to sell in the first place, and and selling is, is their choice. You know, we would hate to see those communities go without some sort of a banking option altogether. If you don't have any buyers at the table, then you don't have a choice but to close your doors. So let's preserve that option, that banking option for those local families that live in that area."
Testimony is scheduled to be shared on the topic at about 2 p.m. on Tuesday in the Finance Committee.
Powerful spring storm will rock Southern Colorado today and Tuesday
After a gorgeous weekend, we're looking at a very busy start to the week for Southern Colorado. A powerful spring storm will produce widespread 30-50 mph gusts on Monday. These dry, downslope winds will increase fire danger on Monday along and east of the I-25 corridor. Red Flag Warnings will be in effect from 11 am until 7 pm.
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