Agency dramatically raises rates that fund nation’s deposit insurance system
Washington, D.C. (Oct. 18, 2022) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today’s FDIC board vote approving an ICBA-opposed proposal to dramatically increase deposit insurance assessments.
“ICBA and the nation’s community banks strongly oppose the FDIC board’s decision to dramatically and uniformly increase the rates banks pay to fund the nation’s deposit insurance system. Today’s vote penalizes community banks and wrongly shifts the burden to community banks to subsidize the systemic risk posed by the nation’s largest banks.
“As ICBA and other groups have stated, the agency’s proposal is based on a faulty assumption that the Deposit Insurance Fund will not meet its minimum level by as late as 2034. In fact, the latest Quarterly Banking Profile suggests the statutory minimum is likely to be satisfied as soon as the first quarter of 2023, obviating the need to raise assessments by more than 50 percent for many community banks.
“This significant rate hike not only disproportionately affects community banks, but it also unnecessarily restricts community bank lending in local communities at a time of economic uncertainty and fails to sufficiently collect enough assessments from the large and complex institutions that pose the greatest risk to the Deposit Insurance Fund. ICBA is profoundly disappointed the FDIC didn’t consider a lower rate hike, the impact on community banks and local communities, or the more than 150 community banker comments submitted opposing the assessment increase.
“ICBA will continue working with the FDIC and urging the agency to advance a more common-sense policy on assessment rates.”
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.