FOR IMMEDIATE RELEASE
ICBA Statement on Senate Action to Reform Bank Deposit Insurance
Washington, D.C. (October 18, 2005) - Camden R. Fine, president and CEO of the Independent Community Bankers of America, issued the following statement following the Senate Banking Committee's approval of the Safe and Fair Deposit Insurance Act of 2005 (S. 1562):
ICBA congratulates the Senate Banking Committee for moving deposit insurance reform forward and commends Chairman Richard Shelby (R-AL) for his leadership in pulling together this important bill that will reform and strengthen the federal deposit insurance system for the benefit of bank customers and local communities. ICBA also thanks Senators Mike Enzi (R-WY), Tim Johnson (D-SD), Chuck Hagel (R-NE) and Wayne Allard (R-CO) for their steadfast support of deposit insurance reform. The committee's action now paves the way for a Senate vote. ICBA urges final enactment this fall.
Importantly, the legislation:
- Helps ensure bank depositors have adequate insurance coverage by raising coverage levels for retirement accounts and authorizing the FDIC to adjust coverage levels for individual and retirement accounts for inflation every five years;
- Creates a stronger deposit insurance fund by merging the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF);
- Promotes fairness in FDIC premiums through assessment credits based on past premium contributions, and by requiring "free riders" to begin paying premiums immediately;
- Allows FDIC flexibility to manage the reserve ratio of the fund including permitting dividends/rebates when the fund reaches a certain level; and
- Reduces destabilizing premium volatility by eliminating the 23 basis point premium "cliff."