A tax credit, set to take effect in June, aims to stimulate de novo activity in the state, which hasn\u2019t chartered a new bank since 2007.<\/p>\n\n\n\n
Oregon has about a dozen state-chartered banks today, down from 50 roughly 25 years ago, Bruun said. In February, Mountlake Terrace, Washington-based FS Bancorp said it would acquire West Linn, Oregon-based Pacific West<\/a> in a roughly $34.6 million deal.<\/p>\n\n\n\n And despite de novo activity more recently taking off in other states such as Florida<\/a> or Georgia<\/a>, as well as regulators\u2019 openness to new bank charters<\/a>, \u201cthere is zero prospect of a new bank starting in Oregon. There\u2019s no conversations,\u201d Bruun said.<\/p>\n\n\n\n \u201cWe are a new banking desert,\u201d he said. <\/p>\n\n\n\n Bruun chalked up some of it to the state\u2019s high business tax rate and property taxes. The other challenge, he said, is unique to banks: Banks have to pay federal taxes, but credit unions don\u2019t. And credit unions are also exempt from Oregon\u2019s business income tax and corporate activity tax, he said.<\/p>\n\n\n\n \u201cThat cost of capital differential in Oregon between credit unions and community banks, I think, is greater than any other state in the country,\u201d he said. About 50 credit unions operate in Oregon, he said.<\/p>\n\n\n\n Bank trade groups argue the tax-exempt nature of credit unions allows them to offer a higher purchase price than banks, leaving acquisitive banks at a disadvantage. Last year, Salem, Oregon-based Maps Credit Union<\/a> acquired<\/a> Oregon City-based Lewis & Clark Bank. <\/p>\n\n\n\n Bruun, wondering last year what could be done to stimulate new bank formation, found Ohio passed a similar law in 2020, offering a tax credit for three years. Ohio, which hadn\u2019t had de novo activity since 2008, has seen the formation of six new banks since then, he said.<\/p>\n\n\n\n About 34 banks take deposits in Oregon, Bruun said, including large lenders JPMorgan Chase, Bank of America, Wells Fargo and U.S. Bank. The biggest state bank is $66 billion-asset Columbia Bank, which is headquartered in Tacoma, Washington, despite its Oregon charter, he said.<\/p>\n\n\n\n Still, \u201cit\u2019s a big state with a lot of rural areas,\u201d and \u201cthere\u2019s a definite need\u201d for community banks, Bruun said. <\/p>\n\n\n\n The Oregon Bankers Association intends to promote the incentive nationally.<\/p>\n\n\n\n \u201cNow we just have to connect the bank talent here in Oregon with the investors,\u201d Bruun said. \u201cIs this a super secret sauce? I don\u2019t know. I sure hope so. What I know is that conversations will happen that haven\u2019t previously happened.\u201d<\/p>\n\n\n\n Paul Davis, founder of Bank Slate Consulting, said the incentive is a positive signal from the state. \u201cIt helps at the margin,\u201d and could prod an organizing group that\u2019s on the fence, he said. <\/p>\n\n\n\n Still, \u201cthere are just so many other factors that an organizing group has to consider,\u201d Davis said, including the bigger challenge of gathering $20 million to $30 million in capital to satisfy Federal Deposit Insurance Corp. requirements.<\/p>\n","protected":false},"excerpt":{"rendered":" A tax credit, set to take effect in June, aims to stimulate de novo activity in the state, which hasn\u2019t chartered a new bank since 2007. Dive Brief: Dive Insight: Oregon has about a dozen state-chartered banks today, down from 50 roughly 25 years ago, Bruun said. In February, Mountlake Terrace, Washington-based FS Bancorp said […]<\/p>\n","protected":false},"author":2,"featured_media":161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-160","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-credit"],"_links":{"self":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=160"}],"version-history":[{"count":1,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/160\/revisions"}],"predecessor-version":[{"id":162,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/160\/revisions\/162"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/media\/161"}],"wp:attachment":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}