Bank branch purchase not a done deal. (Source: Shutterstock)
Elevations Credit Union's proposal to seal the deal on Colorado's first bank buy may be in jeopardy.
The Colorado State Banking Board voted 6 to 1 on Thursday that denied a request from Cache Bank & Trust Greeley in Colo. seeking authorization to sells its assets to the $2.1 billion Elevations Credit Union in Boulder, Colo.
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"The issue before the board was to determine if current state law supported such a sale, as it would have been the first time that Colorado saw such a transaction," the banking board said in a prepared statement. "Board members determined that state statute does not allow for the proposed transaction between Cache Bank & Trust and Elevations Credit Union, and that they, therefore, could not authorize a state bank to sell to a credit union."
The Colorado Bankers Association opposed the sale in a Jan. 13 three-page statement to the state banking board.
"We regard this proposed purchase as an effort to expand the credit union's activities beyond what was contemplated in law and by a process to avoid the clear limitations and intent of Colorado statutes," Don A. Childears, CBA's CEO wrote. "But we are clear; we object to any purchaser not authorized by statute, any buyer that is a nonbank."
A spokesperson for Elevations CU Friday declined comment 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 seeking comment.
Elevations announced in September that it intended to acquire the assets of the $120 million Cache Bank & Trust in Greeley, which specializes in commercial lending. At that time, Elevations noted the credit union bank buy, if approved by regulators, would be a first in Colorado's history.
The CBA argued that state law specifies that a bank may sell its assets to another bank, but that the state statute does not reference any other purchasers of a bank's assets.
"We have no quarrel with Cache Bank & Trust, but we object on principle to any unauthorized purchaser, in essence any nonbank, in such a transaction," Childears wrote. "This includes a tax-advantaged credit union, buying a tax-paying bank. We believe in a free market, but one in which all competing businesses play by the same rules. This isn't the case here."
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
