ACQUIRING CAPITALFOR GROWTH:

MYTH VS. REALITYPart 2

Colorado Bankers Association

140 E. 19th Avenue, Suite 400

Denver, CO 80203

303-825-1575

www.ColoradoBankers.org

4 Forces on Lending (cont’d)

• 4th layer impacting lending – DFA regulatory burden– 2,300 pages, 240 rules, 20,000 pages of regulations, 6.5 feet –

5,000 pages of proposed & final rules to date – 240 page executive summary

– Lending is part art, part science – regulators look only at quantifiable

– Banks forced to focus on internal process v customers’needs

– Bankers spend day accommodating regulatory orders, not accommodating customers & communities

– “1.2 compliance officers for each lender” – compare to OSHA

– Exam bill in Congress (external appeal)– Perlmutter amortization bill passed House in 2010– Coffman & Perlmutter now with several concepts

Scope of Dodd-Frank Act

1. Federal Reserve Act2. Glass/Steagall3. FDIC Act

4. Sarbanes Oxley5. Gramm, Leach, Bliley6. Dodd/Frank Act

Let’s Talk Small BusinessCBA’s Small Business Lending Initiative

Unique

Local success

National acclaim

Model

• Goal: lend money, create jobs, help economy– Help get credit to small business even if the bank isn’t the lender– Maximize conditions for borrowers to get the loan approved

• www.smallbizlending.org– Prep & support small business borrowers – smart borrower– Resources for small businesses – Information & options for lenders – Advice & Resources

• Links• FAQs• Fact sheets• Loan diagram• Lender matrix• Calendar• Sign-up for updates…

– Advice: don't give up; ask why “no” answer; learn from “no”answers

Let’s Talk Small BusinessCBA’s Small Business Lending Initiative

Let’s Talk Small Business

The SchwabBlog A small-business blog that covers health care, politics, economic development and more.

Thursday, March 29, 2012

Colorado bankers answer call for small-business access to capital

Bankers have been called nasty names for years by small-business owners who have been denied credit, but the Colorado Bankers Association has launched an effort that could change that.

Through a website, smallbizlending.org, Colorado bankers are beginning to refer customers who don't qualify for their loans to other organizations around the state that might find a way for the cash-strapped owner to find capital he or she needs to grow.

I've been covering small business in Colorado for more than 20 years, and this effort is the first I've seen between agencies of government and large commercial banks to solve the "access to capital" problem that is a perennial complaint of small-business owners who don't qualify for bank loans.

If you try it, it might actually work.

Example out of many:

Huffington Post

Ongoing Challenges Examples

• State Legislature & ballot initiatives

– Public-owned banks• State owned bank

• Local government owned banks

• “Make loans banks won’t make, but not take any risk”

– Foreclosure• Killed several bad bills in Legislature; now Constitutional

Amendment

• DFA Risk Retention – effectively require 20% down on home mortgages – bad consequences

Path to Recovery - Lenders

• Funds available for lending

• Great desire to lend – no profit from money in vault

• Economic problems improving

• Overcoming regulatory obstacles

• Bankers anecdotally report resurgence – growing customer confidence

• Borrowers’ market – banks compete fiercely for “A”loans

Thank YouColorado Bankers Association

One Sherman Place

140 East 19th Avenue, #400

Denver, CO 80203

Phone: 303-825-1575

Fax: 303-825-1585

www.coloradobankers.org

www.financialinfo.org(consumer information)

Colorado Bankers AssociationGovernment Relations team: CBA

Don ChildearsJenifer WallerCaroline Joy

Colorado Legislative ServicesMelanie LaytonJim ColeGarin Vorthmann

Hogan & HartsonCraig UmbaughOther partners