ICBA - News - News Release - ICBA Opposes Cramdown Amendment to Financial Reform Bill
ICBA News Release Header


ICBA Opposes Cramdown Amendment to Financial Reform Bill

Washington, D.C. (December 10, 2009)—The Independent Community Bankers of America (ICBA) today sent a letter to Congress voicing its position on several amendments that will be considered during the House’s debate on the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173).

While ICBA supports strong systemic-risk legislation and many provisions of the bill that bring parity to Wall Street and Main Street financial institutions, the association vigorously opposes a mortgage-bankruptcy cramdown amendment, proposed by Rep. John Conyers Jr. (D-Mich.), that would result in higher interest rates for homebuyers, make it harder for families to qualify for a home mortgage and undermine ongoing efforts to help families facing foreclosure. ICBA said that the Conyers amendment, if enacted into law, would further destabilize the housing sector and set a very dangerous precedent, jeopardizing the integrity of all public contracts.

The association continued to express grave concern with the creation of the Consumer Financial Protection Agency (CFPA), which would place significant burdens on common-sense community banks. ICBA did, however, express appreciation for the steps an amendment offered by Rep. Walt Minnick (D-Idaho) and several others would take to address several community bank concerns by creating a Consumer Financial Protection Council in place of the CFPA. Additionally, the Minnick amendment would provide meaningful joint rulemaking among the prudential regulators and for examinations of non-banks, steps that would minimize additional burdens on community banks while ensuring adequate consumer protections. While still not perfect, ICBA will work with Congress to build on and improve this effort.

In the letter, ICBA also said it strongly supports a provision in the manager’s amendment that would tighten nationwide deposit-concentration limits. Current law limits deposits in depository institutions in a holding company to no more than 10 percent of all deposits nationwide. However, deposits in savings association subsidiaries are not considered when determining compliance with this limit. This serious loophole allows large holding companies to circumvent this pro-competitive statute. ICBA is the only national trade group fully supportive of tightening the 10 percent nationwide deposit cap because it will help block the creation of too-big to-fail institutions.

Additionally, ICBA said that it opposes an amendment offered by Rep. Paul Kanjorski (D-Pa.) that would strip language in the bill to exclude small publicly held companies, including many community banks, from the costly regulatory burden of complying with Section 404(b) of the Sarbanes-Oxley Act of 2002. Moreover, the association said that it supports an amendment by Rep. Jim Marshall (D-Ga.) that would clarify that the CFPA provisions don’t create any new private rights of action.

To read ICBA’s letter, visit www.icba.org.