FOR IMMEDIATE RELEASE
ICBA Urges Quick Congressional Passage of Deposit Insurance Reform Agreement
Calls Measure 'Pro-Consumer, Pro-Saver, Pro-Retiree, Pro-Community'
Washington, D.C. (December 14, 2005) - The Independent Community Bankers of America (ICBA) expressed strong support for a House-Senate agreement on federal deposit insurance reform as announced by Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Institutions Subcommittee. The ICBA urged lawmakers to pass this legislation before Congress adjourns for the year.
"The agreement in principle announced by Rep. Bachus is pro-consumer, pro-saver, pro-retiree, and pro-community," said David E. Hayes, ICBA chairman and president and CEO of Security Bank, Dyersburg, Tenn. "It ensures that the deposit insurance system will be safe, stable and secure and enable financial institutions to continue to serve their communities through consumer and small business loans, community development projects, home mortgages, education assistance, small business start-up funds, and other worthwhile purposes."
ICBA has long been concerned about the erosion of deposit insurance coverage due to inflation and supports provisions in the agreement that provide for inflation adjustments for FDIC coverage levels at five-year interval and increases coverage for certain retirement accounts to $250,000.
The bill contains other reforms to strengthen the deposit insurance system and make it more stable by smoothing out premium volatility, creating a range in which the reserve ratio can float in lieu of a hard target, providing assessment credits to institutions that have built up the fund in past years, returning dividends to financial institutions when the funds are in excess, instituting a risk-based assessment system, and merging the bank and thrift insurance funds.
"These changes will help ensure deposit insurance coverage levels maintain their value over time for our nation's savers," Hayes added. "Federal deposit insurance is part of the economic safety net for our nation's families, workers and retirees, and should not be allowed to wither away."