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ICBA Expresses Serious Concerns with Single Regulator and CFPA Provisions in Senate Financial Reform Package

Washington, D.C. (November 10, 2009)—The Independent Community Bankers of America (ICBA) today issued this statement following the release of draft financial reform legislation by Senate Banking Committee Chairman Chris Dodd (D-Conn.).

“While ICBA strongly supports meaningful financial regulatory reform and Chairman Dodd’s efforts to rein in the systemically dangerous too-big-to-fail banks and unregulated shadow financial institutions that were the root cause of this economic crisis, the association has very serious concerns with Chairman Dodd’s single bank regulator and Consumer Financial Protection Agency (CFPA) as currently proposed.

“ICBA adamantly opposes a single federal banking regulator. The concept is a deeply flawed approach that would disadvantage our nation’s more than 8,000 community banks, which have always put their customers and communities first, and would ultimately lead to less choice for consumers through a less diverse and robust banking system. Instead, we must recognize the diversity of our cultural heritage and financial system which is reflected in our current system of regulation. While our current system can be improved, it brings a unique balance and perspective through multiple agencies that reflects not only the rich and diverse fabric of our economy, but also the diversity in size and complexity of our financial institutions.

“ICBA is also deeply dissatisfied with the CFPA provisions in the bill. ICBA feels strongly that examination and enforcement authority should be retained by the bank regulatory agencies so that community banks, which have always treated their customers fairly and honestly, are not unduly burdened for the sins of unregulated entities and out-of-control Wall Street firms.

“ICBA is pleased, however, that the bill supports the provisions that make funding for the FDIC Deposit Insurance Fund more risk-based and equitable. This is a step in the right direction for solving too-big-to-fail.

“ICBA looks forward to working with Chairman Dodd and the Senate Banking Committee as this proposal moves forward to ensure any final legislation preserves the dual banking system and does not cause any undue burden on community banks.”