FOR IMMEDIATE RELEASE
ICBA Appreciates FDIC Pledge to Cut Special Assessment
Nation’s Community Banks Should Not Shoulder Wall Street’s Burden
Washington, D.C. (March 5, 2009)—The Independent Community Bankers of America (ICBA) appreciates the Federal Deposit Insurance Corporation’s pledge to cut its 20-basis-point special emergency assessment if Congress approves legislation expanding the FDIC’s existing line of credit with Treasury.
“Scaling back the assessment is a good first step, and we are very grateful to Chairman Bair and the FDIC for being responsive to our recommendations, but more needs to be done. Reducing the assessment will lessen the impact of this expense burden, but the burden remains and additional alternatives should be considered by the FDIC board, such as broadening the assessment base,” said ICBA president and CEO Camden R. Fine. “Main Street community banks did not trigger the current economic crisis and should not have to shoulder a disproportionate assessment burden for those that did.”
To rebuild the Deposit Insurance Fund (DIF), ICBA proposes that the FDIC change the structure of the assessment base and levy a systemic risk premium on the too-big-to-fail institutions that helped trigger the problems that led to the fund being depleted. ICBA recommendations include:
- The assessment should be based on bank assets, not just domestic deposits
- Accounting rules should be changed
- Systemic risk premium should be levied on large banks
ICBA supports legislative provisions in the House that increase the FDIC’s line of credit at the Treasury to further demonstrate that the full faith and credit of the United States backs insured deposits. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is expected to advance legislation to increase the agency’s borrowing authority. ICBA will continue to work with the FDIC to find alternative ways to rebuild the DIF and urges that any proposals set forth not ask common-sense community bankers to shoulder a disproportionate share of the burden so that they can continue to serve their customers in cities and towns throughout America.
For more information, visit www.icba.org.