Buying a bank branch is not a closed deal. (Source: Shutterstock)
Elevations Credit Union’s proposal to seal the deal on Colorado’s first bank purchase could be in jeopardy.
The Colorado State Banking Board voted 6 to 1 Thursday, denying a request from Cache Bank & Trust Greeley, Colorado, asking for approval to sell its assets to the $ 2.1 billion Elevations Credit Union in Boulder, Colorado , requested.
“The issue before the board was to determine whether applicable state law supported such a sale, as it would have been the first time Colorado would have seen such a transaction,” the bank board said in a prepared statement. “The board members determined that state law does not allow the proposed transaction between Cache Bank & Trust and Elevations Credit Union and therefore they cannot authorize a state bank to sell to a credit union.”
The Colorado Bankers Association declined the sale in a three-page statement dated Jan. 13 to the State Banking Board.
“We view this proposed purchase as an attempt to expand the credit union’s operations beyond what is required by law and through a process to avoid the clear restrictions and intentions of the Colorado Bylaws,” wrote Don A. Childears, CEO of CBA. “But we are clear; we contradict every unauthorized buyer, every buyer who is not a bank. “
A spokesman for Elevations CU declined to comment on Friday as “we are waiting to receive and review the written order from the Colorado State Banking Board.” Cache Bank & Trust did not return a CU Times message requesting a comment.
Elevations announced in September that it intends to acquire the assets of Greeley’s $ 120 million Cache Bank & Trust, which specializes in commercial loans. At the time, Elevations determined that if approved by regulators, the purchase of credit unions would be a first in Colorado history.
The CBA argued that state law provides that a bank can sell its assets to another bank, but that state law does not mention other buyers of one bank’s assets.
“We don’t have a dispute with Cache Bank & Trust, but we fundamentally reject any unauthorized buyer, essentially any non-bank, in such a transaction,” wrote Childears. “This includes a tax-privileged credit union that is buying a tax-paying bank. We believe in a free market, but in which all competing companies play by the same rules. This is not the case here.”