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ICBA: Pleased That GAO Study Will Address the Overly Harsh Exam Environment

Washington, D.C. (October 18, 2010)-The Independent Community Bankers of America (ICBA) today praised the Government Accountability Office (GAO) for announcing that it is undertaking a study focusing on the way regulators are examining commercial real estate portfolios at community banks. The study was formally requested by House Financial Services Committee Chairman Barney Frank (D-Mass.) and member Walt Minnick (D-Idaho).

"ICBA is pleased that the GAO has undertaken this critical study. Our nation's nearly 8,000 community banks continue to contend with overly harsh bank exams on a daily basis, and we have grave concerns about how these exams are adversely affecting community banks' ability to lend and may be further exacerbating the current economic downturn," said Camden R. Fine, ICBA president and CEO.  "ICBA thanks Chairman Frank and Rep. Minnick for their dedication to this issue, which is critical to Main Street community banks and their ability to continue to serve their customers." 

ICBA has led the campaign to address the overly harsh exam environment on behalf of community banks.  The association has met repeatedly with regulators and presidential administrations and testified on the issue before Congress. Bank examiners are unjustifiably requiring capital levels much higher than current official standards and are inappropriately downgrading performing commercial real estate loans.

"ICBA continues to advocate strongly for a more measured approach from bank examiners that doesn't impede community banks' ability to aid recovery efforts within their local communities," Fine said.  "We look forward to seeing the GAO report, which we expect will find that overly harsh exams are counterproductive to small business lending during this critical time when it is needed most." 

While the report is scheduled to be released in April 2011, the GAO is expected to testify before Congress beforehand with its interim findings.

 For more information, visit www.icba.org.