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ICBA Announces 2007 Policy Priorities

Support Community Growth, Enhance Choice, Promote Financial Diversity

Honolulu (March 7, 2007)—The Independent Community Bankers of America (ICBA) today announced its top legislative and regulatory priorities for the coming year. ICBA made its announcement at its National Convention and Techworld, the largest and most vital community banking industry event of its kind.

"Whether located in small towns, suburbia or big city neighborhoods, community banks grow our towns and cities by funding small businesses and using local dollars to help families purchase homes, finance college and build financial security," said James P. Ghiglieri, Jr., incoming ICBA chairman, and president of Alpha Community Bank, Toluca, Ill. "Promoting policies such as supporting the separation of commerce from banking, ensuring local farmers have a dedicated source of credit, and promoting financial literacy create a stronger economy for our customers, for the communities we serve and for our entire country."

ICBA's top priorities for 2007 are:

  • Maintaining the Separation of Banking and Commerce. ICBA continues to lead the national effort to close the ILC loophole and keep Wal-Mart, Home Depot and other commercial conglomerates out of banking. Our nation's long-standing policy prohibiting affiliations or combinations between banks and non-financial commercial firms has served our nation well by providing financial stability and soundness. A diverse financial system is beneficial for America's economy, our communities and consumers. ICBA endorses the Industrial Bank Holding Company Act of 2007 (H.R. 698), introduced by House Financial Services Committee Chairman Barney Frank (D-Mass.) and House Financial Institutions Subcommittee Ranking Member Rep. Paul Gillmor (R-Ohio), which would close the ILC loophole and prevent commercial firms from owning industrial banks.

  • Restraining the Farm Credit System from Expanding into Non-Agricultural Lending. ICBA adamantly opposes the Farm Credit System's (FCS) HORIZONS Project which would allow FCS lenders to become the equivalent of commercial banks and tax-exempt credit unions while retaining tax and funding advantages as government sponsored enterprises (GSEs). FCS is seeking a dramatic shift towards general purpose, non-farm lending. The FCS should focus on serving farmers and ranchers.

  • Fighting for Competitive Equity with Tax-Exempt Credit Unions. ICBA opposes expanded powers for credit unions, particularly the plan to raise the cap on member business loans, so long as credit unions remain exempt from taxation and the Community Reinvestment Act (CRA). ICBA supports the right of a financial institution to choose the type of charter under which it operates and supports legislation to prohibit the National Credit Union Administration from using inappropriate means to prevent a credit union from converting to a bank or thrift.

  • Reducing Regulatory and Tax Burden on Community Banks. ICBA's community bank tax and regulatory relief bill (The Communities First Act) was endorsed by nearly 50 state bankers associations and attracted nearly 100 co-sponsors in the last Congress, with several provisions from it enacted into law. While the Financial Services Regulatory Relief Act of 2006 was a welcome downpayment on needed regulatory relief for community banks. ICBA will work to have CFA introduced in the 110th Congress and to pass badly needed regulatory burden and tax relief for community banks, their customers and their communities. Congress and bank regulators need to continue to build a tiered regulatory and supervisory system that recognizes the differences between community banks and larger, more complex institutions.

  • Preserving the Federal Home Loan Bank System. The regional structure and cooperative nature of the Federal Home Loan Bank System must be maintained to best address the diverse needs of its community bank members. Federal Home Loan Bank (FHLB) consolidation should be driven by members. ICBA strongly urges the Federal Housing Finance Board to develop concentration limits for advances for individual FHLBs and the FHLB system to protect the system's safety and soundness.

  • Promoting Beneficial Tax Policy. ICBA continues to promote tax and budget policies that foster economic growth and advance community-bank friendly tax reforms to encourage increased private saving, small business investment and a robust financial service sector.

  • Preserving the Integrity of the Housing GSEs. Congressional efforts to improve the regulation of the Federal Home Loan Banks, Fannie Mae and Freddie Mae must recognize and maintain the unique nature of the FHLBs and clarify the FHLB mission of supporting small business, small farm and small agribusiness financing. ICBA supports increasing the asset size of institutions eligible for community financial institution advances collateralized by small business and agricultural loans to $1 billion in assets. ICBA supports legislation that would allow the markets, not bureaucrats, to determine the size of Fannie and Freddie's portfolios.

  • Promoting Payment System Security, Stability and Fair Access. ICBA supports competitive, progressive and secure payment systems that offer fair and open access to all community banks regardless of size, operational capability or location to meet the evolving payment needs of their customers. ICBA supports the Federal Reserve System in its dual role as payments regulator and provider of payment services and encourages the system to take steps to ensure that these roles remain in place.

  • Reducing Unnecessary Costs and Burdens of Sarbanes-Oxley. ICBA supports sound corporate governance for all corporations. However, many of the requirements of the Sarbanes-Oxley Act of 2002 are unnecessarily costly and burdensome for many publicly held businesses, including community banks. Small publicly held companies should be exempt from the internal control attestation and audit requirements of Section 404 of Sarbanes-Oxley, as well as some of the reporting requirements of the Securities Exchange Act of 1934. The 500-shareholder threshold for reporting under the Exchange Act should be updated and increased.

  • Protecting Customer Privacy and Data Security. Community banks are strong guardians of the security and confidentiality of sensitive customer information as a matter of good business practice and Gramm-Leach-Bliley Act (GLBA) and regulatory requirements. Safeguarding customer information is central to maintaining public trust. ICBA supports a national standard for financial privacy and data security for entities that use or process sensitive customer information that protects community banks and their customers against fraud.

  • Promoting Financial Literacy Education. Community banks engage in a wide range of financial education efforts, many in conjunction with local schools and civic groups. ICBA supports and promotes financial literacy programs, especially those that help the underserved, disadvantaged and emerging markets, because increasing financial literacy fosters financial stability and benefits individuals, communities, and our nation as a whole.

For more information, visit www.icba.org.