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Community Bankers Hit The Hill in Numbers During ICBA Washington Policy Summit

Top issues: Stopping the credit union power grab, supporting TAG extension and Communities First Act

Washington, D.C. (April 25, 2012)—Today nearly 1,000 members of the community banking industry gathered in Washington for the Independent Community Bankers of America (ICBA) annual Washington Policy Summit, which runs through Thursday. Community bankers from around the nation will meet with their members of Congress to discuss top issues that affect community banks and the customers they serve on Main Street. Key issues include stopping the unfair credit union power grab, supporting the Communities First Act regulatory relief, extending the FDIC Transaction Account Guarantee (TAG) deposit insurance coverage and creating a new farm bill.

“Main Street community bankers are eager to press their issues with their members of Congress,” said Jeff Gerhart, chairman of ICBA and chairman of Bank of Newman Grove, Neb. “Community bankers do the bulk of the nation’s small business lending and are key to supporting a robust economic recovery. Having ICBA member community bankers in Washington to ensure the community bank perspective is heard loud and clear is critical to Main Street communities.”

Community bankers plan to address the following issues with members of Congress, while making specific recommendations, including:

  • Opposing S. 2231/H.R. 1418, legislation that tax-exempt credit unions are pushing to expand into prohibited commercial lending. The bill would more than double the cap Congress put on member business loans from 12.25 percent of assets to 27.5 percent. The current cap is not arbitrary and is intended to keep credit unions focused on their original tax-exempt mission of lending to consumers of modest means. Expanding credit union commercial lending powers would be unfair and harmful to community banks and the communities they serve and costly to taxpayers because it would reduce the taxable lending activities of community banks, and it would further divert credit unions from their mission.

  • Supporting a five-year extension of the FDIC TAG program, which is fully paid for by banks. Today more than $1.4 trillion, or 20 percent of the nation’s deposits, are insured under TAG. Congress is playing with fire if it doesn’t address the December expiration of the TAG insurance. As long as global financial markets and the economic recovery remain fragile, TAG is needed to protect small business and municipal deposits. If TAG coverage ends abruptly at year-end, the shift in funds could destabilize the recovering banking system, curtail credit and threaten economic recovery.

  • Supporting the Communities First Act (S. 1600/H.R. 1697) regulatory relief and curbing harsh exams. Overzealous safety and soundness exams and excessive regulation can have a chilling effect on lending and economic recovery. Also, regulatory, tax and paperwork requirements impose a disproportional burden on community banks, diminishing their ability to attract capital and support credit needs. The Communities First Act will provide needed regulatory relief for community banks so they can continue to serve their customers and communities. Community bank lending to small businesses is essential to economic recovery and should be promoted, not impeded.

  • Creating a new farm bill because the current bill expires on Sept. 30. The new farm bill should maintain crop insurance funding and address regional differences as needed for different crops. ICBA urges Congress to reject legislation or regulations that allow the Farm Credit System to expand into non-farm credit. Congress should also maintain robust USDA guaranteed farm and business loan programs.

For a full list of ICBA’s policy priorities, visit www.icba.org.