Colorado Loan Contracts and Banking Law

In almost every state in the country, there are laws which govern the formation and operation of loan contracts that need to be observed in order to operate in a compliant manner in the legal and banking system if money is being loaned to someone in that state.  If you are taking out a loan or you are operating a loans related business it is certainly important to ensure that your business is compliant with the relevant banking and loan statutes.  Also, as a consumer you can obtain significant protections from having an adequate knowledge of the relevant loans and banking laws which are in operation in your state.

The laws of banking in Colorado are largely found within the Colorado Banking Code which is Title 11 of the Colorado Statutes.  The beginning of the legislation explains its object and purpose including a statement of the legislative policy underpinning the laws.  The statute then goes on to determine the effect on existing banks and the scope of the application of the banking code in jurisdictional terms.  There is a library which includes a set of banking related definitions for use under Colorado law and a part of the legislation which creates the government department responsible for the oversight of the banking system in Colorado and the administration of the legislation.  This part of the legislation includes an element which defines the powers of the commissioner and the banking board as well as their respective duties.

The Colorado banking statutes also include specific protections for consumers in relation to the formation and operation of non-traditional mortgages.  If a consumer makes a complaint to the banking board, the banking board has a number of investigative powers to subpoena potential witnesses for the production of records and to conduct independent administrative reviews of the operations of banks in the state.  There are a number of parts of the legislation which require banks to keep records for a certain length of time and to provide these records to the banking board where necessary.  Also, the law makes many of the elements of banking records confidential and only disclosable to those authorities authorised by law to gain access to the records.  The records and information provided to the banking board are also the subject of the annual reports on the operations of the banking system published by the Commissioner of the Banking board.

The legislation also contains a number of rules dealing with conflicts of interest for officers involved in the banking system, the penalties for breaches of these provisions as well as a framework for the removal and suspension of bank officers.  If banks breach the banking law civil penalties can be imposed upon them and officers or directors of the bank can be removed.  The law also says that state banks are to be incorporated as a limited liability company.  One of the more recent introductions to the banking law in Colorado has been the laws regarding capital adequacy requirements which make it mandatory for banks to be able to pay a certain percentage of their total current liabilities.  The banking laws in this state also make it mandatory for directors to make a legislative declaration in relation to certain matters and limit the extent to which insurance can be obtained in relation to liability for breaches of the state banking code.

The code also contains a number of regulations concerning the merger and acquisitions which can take place in relation to banks, the liquidation or dissolution, how they may be organised around holding companies and the extent of banking practices which are permissible under the legislation in Colorado.  For instance, there are rules about Saturday trading for banks as well as consumer protection in relation to electronic funds transfers.  Banks are also limited by the law of their state to dealing in certain types of loans, acceptances and investments as well as letters of credit.

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