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ICBA Urges Banking Agencies to Support Meaningful Burden Reduction Measures

Washington, D.C. (November 15, 2005) - The Independent Community Bankers of America (ICBA) commended the bank agencies for their comprehensive review of regulations under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) and urged them to support regulatory relief legislation before Congress as well as take further measures that don't require legislation.

"ICBA is pleased the banking regulators support some of the regulatory reduction measures before Congress, but notes the agencies have had difficulty reaching a consensus on many items in the ICBA-backed Communities First Act (H.R. 2061)," said Karen Thomas, ICBA executive vice president and director of government relations. "ICBA urges the agencies to continue working to reach consensus on meaningful legislative initiatives to reduce regulatory burden for community banks such as allowing customers to waive the three-day right of rescission under the Truth-in-Lending Act and expanding HMDA reporting exemptions."

In a letter to regulators, the fifth in a series on the bank agencies' EGRPRA project, ICBA recommended:

  • Loans to Officers and Directors: Eliminating the special board-approval requirement for insider loans; increasing to $250,000 the special regulatory lending limit on loans to executive officers to adjust for inflation; increasing to $3,000 the inadvertent overdraft exception; and providing a flow chart of insider lending rules as a useful compliance tool.

  • Reserve Requirements: Allowing an inter-account transfer each business day for money market deposit accounts rather than the current limit of six per month, so banks can better serve small business customers; adopting a longer period for computing reserve requirements to prevent volatility in reserves; implementing abbreviated reporting for banks that consistently meet reserve requirements with vault cash; and including a commentary that incorporates all interpretative letters concerning reserve requirements.

  • Management Interlocks: Exempting community banks with less than $500 million in assets to mitigate difficulties in finding qualified persons to serve as directors.

  • Reimbursement for Providing Financial Records: Changing the Right to Financial Privacy Act under so banks are reimbursed more often for costs of producing records to government agencies.

  • Check Collection and Funds Availability: Extending the funds availability time frame for postal money orders, cashier's checks, and official bank checks if a bank questions the check's authenticity; and reviewing the funds availability schedule as the Check 21 Act implementation progresses.

Read the full text of ICBA's comment letter at www.icba.org.