FOR IMMEDIATE RELEASE
ICBA Urges FDIC/SEC To Ease Bank Regulatory Burden
Raising Asset-Size Threshold Achieves Meaningful Relief For Community Banks
Washington, D.C. (Sept. 20, 2005) -- The Independent Community Bankers of America (ICBA) urged the FDIC to raise the threshold for complying with the internal control reporting requirements under the Federal Deposit Insurance Corporation Improvement Act (FDICIA), a move that would relieve unnecessary regulatory burden for community banks.
"ICBA strongly supports the FDIC proposal to increase the asset size threshold to $1 billion for internal control assessments and for requiring audit committee members to be independent of management," said Camden R. Fine, ICBA president and CEO. "Raising the threshold to $1 billion will achieve meaningful burden reduction for community banks without sacrificing safety and soundness."
In a comment letter to the FDIC, ICBA also urged the agency to adopt its own accounting independence rules under FDICIA so that accountants located in small and medium-sized markets or where there is a shortage of qualified tax accountants can perform tax services for key officers and directors of their community bank clients.
ICBA has also urged the Securities and Exchange Commission to adopt a similar community bank exemption for publicly held banks that are subject to Section 404 of the Sarbanes Oxley Act, or SOX. Section 404 requires companies to perform internal finance assessments and set up internal financial controls. An ICBA's recent survey of community banks on the costs of complying with SOX Section 404 found that the average community bank will spend more than $200,000 and devote over 2,000 staff hours to comply with Section 404. Since the survey was released last March, ICBA has urged the FDIC to increase the asset size threshold to $1 billion for internal control assessments and for the SEC to adopt a community bank exemption under Section 404.
"SOX Section 404 is another example of a regulatory burden that disproportionately affects community banks," said Fine. "Since community banks are already highly regulated and closely supervised entities, there is little added public benefit associated with these high compliance costs."
ICBA's comment letter to the FDIC can be found at its website at www.icba.org.