FOR IMMEDIATE RELEASE
ICBA Statement on New Treasury Guaranty Program
Washington, D.C. (September 19, 2008)—Camden R. Fine, president and CEO of the Independent Community Bankers of America (ICBA), issued the following statement on Treasury Secretary Paulson's announcement of a new Treasury Guaranty Program to insure money market mutual funds.
"ICBA understands these are times of great stress on our financial system and government action is warranted in some cases, but the Treasury's new plan to insure money market mutual funds is extremely troubling to the community banking industry. Community banks must be taken into account in crafting the Treasury Guaranty Program. Community banks are the economic backbone of America's communities and any new program must not disadvantage them, their small businesses, their customers and their communities.
"ICBA is extremely concerned about the Treasury's announced mutual fund guaranty program. ICBA cautions Treasury not to propose any solution to Wall Street's turmoil that will drain funding from community banks, constraining their ability to fund local economic activity and growth and serve local communities across the nation.
"Therefore, any new guaranty program for money market mutual funds must be temporary. It must not include insurance limits that are higher than those for FDIC insured deposits and must include fees that allow community banks to maintain their ability to serve their customers and continue to compete in the marketplace. The fees imposed through the new Treasury Guaranty Program should be at least commensurate to bank deposit insurance assessments. Banks have paid tens of billions into the deposit insurance fund. Furthermore, the program should be risk-based, so that the money market mutual funds posing the greatest risks to the program also pay the highest fees.
"The vast majority of our nation's community banks are healthy and stable financial institutions that their customers and communities depend on day in and day out. Community banks should not pay the price for problems they did not cause."