Government Direct Lending (State)
Background -
Three bills were being considered in the Legislature that would allow the government to become a direct lender to different parties and for different purposes. CBA was opposed to all three. Generally the CBA Board and Government Affairs Committee adamantly oppose any direct lending by a government agency that is already being serviced by the banking industry. Each situation is obviously unique in and of itself, but generally, direct government lending will create unfair competition from the government, which takes business away from tax paying entities and tax paying Coloradans. It also forces the state to put our scarce tax dollars at risk to cover any lending losses a program might incur.
Issue -
Direct government lending for renewable energy renovation projects in residential houses. (HB 1350) Rep. Miklosi (1st term) introduced a well-intentioned but objectionable bill that will allow the state government to directly lend $225 million to consumers for renewable energy and energy conservation renovation projects. Among other things, this proposal would allow the government to
- undercut your rates
- lend to your customers
- place a super priority government lien on a participating property (ahead of the 1st mortgage)
- set up a statewide special district with inadequate thought to business or financing aspects
CBA Position -
HB 1350 is bad public policy. It is a harmful approach that forces a taxpaying private industry to directly compete with the State. CBA and banks strongly support energy improvements to homes, but oppose HB 1350.
CBA’s Proposal -
Instead of a government direct lending approach, CBA has recommended the creation of a state guarantee program, which would allow the state to leverage money to promote these projects since both state and federally chartered banks, as well as other financial institutions already loan money for home energy efficient improvements and renewable energy improvements. HB 1350 text is accessible at (insert link) as well as its numerous sponsors. It allows the state government to directly lend $225 million to consumers for renewable energy and energy conservation renovation projects.