FOR IMMEDIATE RELEASE
ICBA, Powell Goldstein Urge Securities Law Reform for Community Banks
Washington, D.C. (August 31, 2005) - The Independent Community Bankers of America (ICBA) and Powell Goldstein LLP have jointly urged the SEC Advisory Committee on Smaller Public Companies to recommend steps to relieve unnecessary regulatory burden on publicly held community banks imposed by the securities laws and the Sarbanes-Oxley Act of 2002 ("SOX").
In a letter to the SEC, ICBA and Powell Goldstein noted that publicly held community banks are going private in record numbers because of the costs and regulatory burden of the securities laws. These burdens divert attention away from community banks' day-to-day business and service of customers with little corresponding benefit to the bank or its investors. In addition, SOX is redundant for community banks as they are subject to strict supervision by bank regulators that assures their safe and sound operation and good internal control systems.
ICBA and Powell Goldstein recommended that the SEC follow the example of the FDIC under the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) and exempt community banks from the internal control attestation requirements of Section 404 of SOX. The FDIC has recently proposed doubling the asset threshold for the internal control attestation requirements of FDICIA to exempt banks with assets of less than $1 billion.
ICBA and Powell Goldstein also recommended:
- Delaying by one year the implementation of SOX Section 404 for non-accelerated filers to give these companies additional time to document, test and evaluate their internal controls;
- Raising the $75 million public float threshold in Exchange Act Rule 12b-2 (to $700 million) that triggers accelerated filing status;
- Dropping plans to shorten current filing deadlines for Forms 10-K and 10-Qs (e.g., 75 days for annual reports and 40 days for quarterly reports);
- Revising SEC Regulation S-B to streamline the disclosure requirements for smaller companies;
- Relaxing the director independence standards under the exchange rules; and
- Changing the auditing standards to allow independent auditors to provide more assistance to their clients without jeopardizing independence.
ICBA and Powell Goldstein's letter to the SEC Advisory Committee can be found on the ICBA website at www.icba.org.