Community Bankers Association of Illinois

July 15, 2010

The Senate today voted 60 to 39 to approve landmark legislation to restructure the nation's system of financial regulation. After months of hearings, markups, votes and conference negotiations on this once-in-a-generation measure, the Senate vote is the final step before sending the bill to President Obama to be signed into law. CBAI will soon provide a more detailed analysis of the reform measure, however the victories in this bill for community banks include:

  • a change in the FDIC insurance assessment base from total deposits to total assets less tangible capital - saving community banks billions of dollars;

  • a permanent increase in FDIC insurance to $250,000.00;

  • a two year extension of the Transaction Account Guarantee Program;

  • preservation of the Federal Reserve's examination authority for state-chartered community banks and bank holding companies;

  • the elimination of a provision that would have subjected state chartered banks to national lending limits;

  • the allowance of new thrift charters;

  • a 3 year moratorium on new Industrial Loan Companies (ILCs);

  • the continued exemption for small publicly held companies from the auditor attestation requirements of Sarbanes-Oxley Section 404(b);

  • an exemption from the 5% risk retention rule for "qualified residential mortgages"; and

  • an exemption for banks under $10B from primary examination and enforcement by the Consumer Financial Protection Bureau (CFPB).

CBAI will continue working with the ICBA, Congress, the administration, and regulators to make needed improvements to policies introduced by the new law during the rulemaking process and via legislation that may be forthcoming this year and in future Congresses.

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