FOR IMMEDIATE RELEASE
ICBA Disappointed in FDIC Rule on One-Time Assessment
Washington, D.C. (October 10, 2006)—The Independent Community Bankers of America (ICBA) regrets that the FDIC's final rule on the allocation of the one-time deposit insurance assessment credits under the recently passed Federal Deposit Insurance Reform Act of 2005 (Reform Act) will penalize many community banks that bought deposits or branches from other banks, causing them to pay higher deposit insurance premiums than appropriate.
"ICBA is disappointed that the FDIC Board defined 'successor' under the Reform Act as only the resulting institution in a merger or consolidation," said Karen Thomas, ICBA executive vice president and director of government relations. "This approach penalizes community banks that have purchased deposits during the last ten years since it doesn't include the assuming institution in a deposit purchase transaction. We would have preferred the FDIC use both 'follow the deposit' and 'follow the charter' approaches to ensure a fair allocation of the one-time assessment credits."
"We are pleased that the FDIC considers a 'successor' to be an assuming or the resulting institution in the case of a de facto merger," said Thomas. "With regard to dividend allocations, we look forward to future rulemaking when the FDIC will consider a bank's 1996 assessment base, as well as its contributions to the Deposit Insurance Fund since that time."
Learn more about ICBA's position on the new assessment credit rule at www.icba.org.