FOR IMMEDIATE RELEASE
ICBA Urges Fresh Tax Incentives to Stem Housing Crisis
Tells Congress "Road to Economic Recovery Must Go Through Housing"
Washington, D.C. (June 5, 2008)—The Independent Community Bankers of America (ICBA) urged Congress to enact additional tax incentives to boost the nation's stalled economy-especially a first-time homebuyer tax credit to jump-start stalled home sales, strengthen credit markets and small businesses.
"The ongoing sharp decline in real estate values must be addressed before genuine stability can be achieved in the broad credit markets and economy," said John W. Puffer III, chairman of ICBA's Tax Committee and chairman and president of Pilot Bank in Tampa, Fla., before a House Small Business Committee hearing on the housing crisis and tax incentives. "America's small businesses are facing difficult economic times and acquiring credit is often problematic due to the ongoing turmoil in the housing sector. The road to economic recovery must go through housing."
To address a slowing economy, ICBA first recommended a homebuyer tax credit in its nine point economic stimulus plan in January. With continued housing market troubles, the credit is gaining momentum in Congress. "The first-time homebuyer tax credit would provide an incentive for potential qualified buyers to get off the sidelines and take advantage of low interest rates and the temporary tax break to purchase a home," Puffer said.
"We must break the vicious downward cycle in the housing sector," Puffer said. "Housing activity peaked nearly three years ago and since then home sales have fallen nearly 40 percent, housing starts more than 60 percent, and home prices some 15 percent. Notably, states like California, Nevada, Florida, Michigan, and Ohio have witnessed some of the most dramatic declines in their housing markets and associated economic declines. Restoring confidence in the housing market is vital to restoring economic growth."
ICBA strongly championed the role community bankers can play in restoring the housing market and the greater economy. Noting that common sense community bankers largely avoided the subprime debacle, Puffer urged Congress to view community banks as an instrument to aid homebuyers and small businesses and to stimulate the nation's struggling economy. "We are well-positioned, well-capitalized and willing to help," Puffer said.
To read the full testimony and learn more about ICBA's nine point economic stimulus plan, visit www.icba.org.