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ICBA Announces 2008 Policy Priorities

Support Community Growth, Enhance Choice, Promote Financial Diversity

Orlando, Fla. (March 4, 2008)—The Independent Community Bankers of America (ICBA) today announced its top legislative and regulatory priorities for the coming year. ICBA made its announcement at its National Convention and Techworld, the largest community banking industry event of its kind.

"By ICBA promoting policies such as maintaining the separation of banking and commerce, fighting for competitive equity with credit unions and reducing the weight of mounting unnecessary regulations we create a stronger economy for our customers, for the communities we serve and for the entire country," said Cynthia L. Blankenship, incoming ICBA chairman and vice chairman and chief operating officer, Bank of the West, Irving, Texas. "Whether in small towns, suburban areas or big city neighborhoods, community banks grow our towns and cities by funding small businesses and using local dollars to help families purchase homes, finance college and build financial security."

ICBA's top priorities for 2008 are:

  • Maintaining the separation of banking and commerce. ICBA strongly supports our nation's long-standing policy prohibiting affiliations or combinations between banks and non-financial commercial firms and endorses legislation in Congress to close the industrial loan company (ILC) loophole that permits commercial firms to own FDIC-insured industrial banks.

  • Keeping the Farm Credit System focused on agricultural lending. ICBA adamantly opposes allowing the Farm Credit System's lenders to become the equivalent of commercial banks and tax-exempt credit unions while retaining tax and funding advantages as government-sponsored enterprises (GSEs). FCS is seeking a dramatic shift towards general purpose, non-farm lending, and ICBA believes the FCS should stay focused on serving farmers and ranchers.

  • Fighting for competitive equity with tax-exempt credit unions. ICBA opposes expanded powers for credit unions, particularly raising the cap on member business loans, as long as credit unions remain exempt from taxation and the Community Reinvestment Act (CRA). Credit unions should comply with the same CRA requirements as community banks. ICBA supports the right of a financial institution to choose the type of charter under which it operates and encourages credit unions to convert to bank or thrift charters if they want to enjoy expanded powers.

  • Reducing regulatory and tax burden on community banks. ICBA asks Congress to enact comprehensive regulatory and tax relief for community banks and strongly supports the ICBA-initiated Communities First Act which would provide badly needed relief for community banks, their customers and their communities. ICBA strongly urges Congress and bank regulators to continue to build a tiered regulatory and supervisory system that recognizes the differences between community banks and larger, more complex institutions.

  • Community banks are common sense lenders. Despite current market turmoil, community banks are in solid shape with plenty of liquidity and are ready to lend - factors essential to assisting their communities' recover from unprecedented numbers of foreclosures and a housing market that is nearly at a standstill. ICBA strongly opposes predatory lending practices and believes that these practices should be stopped through enforcement of existing anti-predatory lending laws and regulations.

  • Maintaining the unique nature of the Federal Home Loan Bank System. ICBA supports the regional structure and cooperative nature of the Federal Home Loan Bank System, and believes it must be maintained and recognized in regulatory oversight, as it best addresses the diverse needs of the system's community bank members and the communities they serve. ICBA strongly urges the Federal Housing Finance Board to develop concentration limits for advances for individual FHLBanks and the FHLBank system to protect the system's safety and soundness.

  • Promoting tax and budget policies that encourage private savings and small business investment. ICBA promotes tax and budget policies that foster economic growth and advance community-bank friendly tax reforms to encourage increased private saving, small business investment and a robust financial service sector. ICBA promotes a fair and unbiased tax code that will preserve and enhance the viability of community banks and their vital role as a critical source of lending for consumers, small businesses and farms.

  • Preserving the integrity of the housing GSEs. ICBA supports congressional efforts to improve the regulation of the Federal Home Loan Banks, Fannie Mae and Freddie Mac, that recognize the unique nature of the FHLBanks and retain the GSE status of all the housing GSEs. ICBA strongly supports increasing the asset size of institutions eligible for community financial institution advances collateralized by small business and agricultural loans to $1 billion in assets. ICBA strongly opposes artificial limits on the GSEs' portfolios or requirements that the new regulator consider issues beyond safety and soundness when considering the size or makeup of their portfolios. Lenders in high-cost areas should be permitted to sell larger loans to Fannie Mae and Freddie Mac. This would greatly benefit homebuyers in communities along the coasts and in larger cities where the median home price is relatively high.

  • Promoting payment system security, stability and fair access. ICBA supports competitive, progressive and secure payment systems that offer fair and open access to all community banks regardless of size, operational capability or location to meet the evolving payment needs of their customers. ICBA supports the Federal Reserve System in its dual role as payments regulator and provider of payment services and encourages the system to take steps to ensure that these roles remain in place.

  • Reducing the unnecessary costs and burdens of Sarbanes-Oxley. ICBA supports sound corporate governance for all corporations. Since many of the requirements of the Sarbanes-Oxley Act of 2002 are unnecessarily costly and burdensome for many publicly held businesses including community banks, small publicly held companies should be exempt from the internal control attestation and audit requirements of Section 404 of Sarbanes-Oxley as well as some of the reporting requirements of the Securities Exchange Act of 1934. In addition, the 500-shareholder threshold for reporting under the Exchange Act should be updated and increased.

For more information, visit www.icba.org.