Colorado bankers are dancing on the grave of Amendment 24.
The measure, which the bankers say would have cooled Colorados economy and, in turn, the performance of its banks, was soundly beaten at the polls Tuesday.
Seventy percent of voters rejected Amendment 24, which would have required many of Colorados cities and counties to map out areas for growth and put that map before a public vote every year there was a change in use for a particular property within the maps boundaries.
Apparently, Amendment 24s opponents persuaded residents that the annual vote would have stifled the development process and Colorados economy.
This measure would have made it too difficult for business to be conducted in the state, and developers would have just gone to other states that did not have the onerous restrictions that would have been in Colorado, said Robert Hays, president and chief executive officer of $335 million-asset Pueblo Bank and Trust Company in Pueblo.
The flight of developers would have stung most banks in the state, including $610 million-asset Colorado Business Bank in Denver, said Virginia Berkeley, president. It would have had a dramatic impact on our bank, because well over a third of our portfolio is in real estate construction, she said. We would have had to refocus and look for additional lines of business.
Even before the failure of Amendment 24, Colorado banks had grown more conservative in their real estate lending, worried that the real estate boom particularly in the Denver area had reached its peak.
Those fears were confirmed by a Sept. 26 report by the Federal Deposit Insurance Corp. that concluded the Denver area was among 13 regions in the country at risk for overbuilding.
The FDIC report was a wakeup call, and were seeing banks tightening up, said Adam Winter, president and CEO of $175 million-asset Peoples National Bank in Colorado Springs. Were now ensuring the values are there in real estate deals and that the cash in the project is real. Were looking for less-speculative deals.