FOR IMMEDIATE RELEASE
Deposit Insurance Reform Becomes Law ICBA Chairman Attends Signing Ceremony
New Law Expands Economic Safety Net for Workers and Retirees
Washington, D.C. (February 8, 2006) - Independent Community Bankers of America's (ICBA) six-year effort to update and modernize federal deposit insurance came to fruition today as President Bush signed Omnibus Budget Reconciliation legislation that includes reforming deposit insurance. David E. Hayes, ICBA chairman, and president and CEO of Security Bank, Dyersburg, Tenn., attended the White House ceremony today.
"ICBA has worked tirelessly as the leading proponent of this reform for the last six years on behalf of community banks, so we are thrilled these efforts have come to fruition," said Hayes. "It's truly an honor to attend this bill signing ceremony particularly because the changes brought about by this new law will benefit our customers and communities."
"This new law is tremendously important in making FDIC insurance a more stable and fair system for community banks and for consumers," said Camden R. Fine, ICBA president and CEO. "Thanks to the Congressional leadership and our member banks, deposit insurance reform is now a reality."The new law increases coverage for certain retirement accounts to $250,000. The law also sets up a permanent system of inflation adjustments, authorizing the FDIC to increase coverage limit — currently $100,000 — for inflation every five years.
In addition to the coverage provisions, the deposit insurance reform contains measures to smooth out premium volatility for banks, creating a range in which the fund's reserve ratio can float in lieu of a hard target, provides premium credits to institutions that have built up the fund in past years, returns dividends to financial institutions when the fund exceeds certain levels, institutes a risk-based premium system and merges the bank and thrift insurance funds.