FOR IMMEDIATE RELEASE
ICBA Supports Stronger GSE Regulation, Urges Congress to Preserve Local Access to Capital
Washington, D.C. (March 12, 2007)—The Independent Community Bankers of America (ICBA) told Congress that the association strongly supports efforts to improve the regulation of Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs) as key to their long-term health and stability and urged lawmakers to preserve local communities' access to loans via the capital markets.
"The housing GSEs make it possible to combine wholesale funding and community bank service at the local level," said Mike Menzies, ICBA vice chairman and president and CEO of Easton Bank and Trust Company, Easton, Md., testifying before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. "Rather than take any steps to undermine this unique mission, we recommend that Congress improve and enhance it by establishing a strong, independent regulator focused on safety and soundness."
Though very different in key respects, all three of the GSEs provide community banks and the communities they serve with irreplaceable access to the capital markets. "This access allows our members to offer the same home mortgage products to community bank customers that the largest firms offer to theirs," Menzies said.
ICBA also said that:
- A strong, independent regulator should have the authority consistent with that of banking regulators, to establish, and modify as necessary, risk-based and minimum capital that the GSEs must hold to ensure their safety and soundness.
- Congress should clarify that the mission of the FHLBs includes providing liquidity and economic development funds to community financial institutions to serve their small farm, small agri-business and small business customers.
- Community banks value the current regional structure of the FHLBs because it reflects their regional diversity and oppose FHLB consolidation.
- ICBA opposes imposing a cap on the GSEs' growth.
- ICBA opposes permitting financial institutions to belong to more than one FHLBank using a single charter (multi-district membership).
Read ICBA's complete testimony at www.icba.org.