Call to Action Continues on FDIC Special Assessment by April 2
Send Your Letters to FDIC on Special Assessment Now!CBAI’s call to action remains in effect to convince the FDIC not to levy a special assessment on community banks. Thanks to thousands of emails and letters from community bankers, the FDIC said it will reduce the assessment from 20 to 10 basis points if Congress increases the FDIC’s line of credit with the Treasury from $30 billion to $100 billion. Legislation has been introduced to permanently increase the limit to $100 billion. CBAI and ICBA strongly believe that community banks should not pay any special assessment. Instead, the too-big-to-fail banks that largely caused the nation’s economic crisis with their excessive risk-taking should replenish the FDIC fund. It’s noteworthy that only the community banking lobby is articulating this position and also urging Congress to break up the TBTF banks so they do not pose a systemic risk. The ABA and its state affiliates are apparently unwilling to assign responsibility to the TBTF institutions. ACTION #1: CBAI urges all officers and directors of community banks to communicate the following positions to the FDIC before April 1, 2009:
- • Community banks, which did not cause the economic crisis, should not pay any special assessment.
• The FDIC should ask Congress for the authority to levy special assessments on the TBTF banks that caused the financial meltdown.
• The FDIC should tap its line-of-credit with the Treasury.
• If all banks are assessed, then the FDIC should assess premiums based on total assets rather than domestic deposits, which would rightfully place greater responsibility on the TBTF banks.
- • Community banks, which did not cause the economic crisis, should not pay any FDIC special assessment.
• Authorize the FDIC to levy a special assessment only on the too-big-to-fail banks that are largely responsible for the financial and economic meltdown as a result of their excessive risk-taking and greed.
• Support an increase in the FDIC’s line of credit from the current $30 billion to $100 billion.
• If all banks are assessed, then urge the FDIC to assess premiums on the basis of total assets rather than domestic deposits; the TBTF banks would then be responsible for a larger portion of the assessment.
• Urge the Financial Accounting Standards Board (FASB) to give banks the option to spread any special assessments over four years.