FOR IMMEDIATE RELEASE
ICBA Applauds Passage of Cardoza Amendment to H.R. 1664
Community banks did not engage in compensation practices at the heart of TARP bonus scandals
Washington, D.C. (April 2, 2009)—The Independent Community Bankers of America (ICBA) thanked Rep. Dennis Cardoza (D-Calif.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) for their work on an amendment to H.R. 1664, the executive compensation legislation applicable to TARP recipients. The amendment, which was sponsored by Rep. Cardoza and supported by Chairman Frank, recognizes that our nation’s more than 8,000 community banks did not engage in the unreasonable and excessive compensation practices that are at the heart of the Troubled Asset Relief Program (TARP) bonus scandals. The House adopted the Cardoza amendment without any opposition.
“Community banks appreciate the efforts of Rep. Cardoza and Chairman Frank to ensure that community banks participating in the TARP Capital Purchase Program (CPP) are not burdened by regulations to correct compensation practices that occurred at the largest financial institutions,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “Recognizing the important role community banks play in our economic recovery, both the Obama and Bush administrations have encouraged community banks to participate in the CPP. The CPP provides additional resources to participating community banks to enhance their role as catalysts for economic recovery in cities and towns throughout America. It would be a shame if regulations designed to correct abuses at the largest institutions caused community banks to reconsider their continued participation in the CPP.”
The Cardoza amendment takes a targeted approach to the regulation of executive and employee compensation by allowing the Treasury secretary to concentrate his efforts where the problems existed in the first place—the largest financial institutions. The amendment allows the secretary to exempt community financial institutions from the compensation standards established under H.R. 1664 if the secretary finds that an exemption is consistent with the purposes of the new legislation. Community financial institutions are defined as institutions that receive or have received no more than $250 million under the CPP.
The Cardoza amendment will encourage the participation of community banks in the CPP and enhance the community bank industry’s role as leaders in our nation’s economic recovery.