US Senate Unanimously Approves CBAI-Supported FDIC Assessment Amendment

The US Senate just voted 98 to 0 to include an important ICBA/CBAI proposed amendment in the financial reform legislation (S. 3217). Sponsored by Senators Tester (D-Montana) and Hutchinson (R-Texas) and co-sponsored by Senator Roland Burris (D-Illinois) and 10 other senators, the amendment will ensure that community banks will not any longer be forced to pay more than their fair share for FDIC deposit insurance. The amendment bases FDIC assessments on total assets minus tangible equity, not domestic deposits. This proposal will reduce FDIC assessments of 98 percent of community banks with less than $10 billion in assets, keeping nearly $4.5 billion in community banks and their communities over the next three years.

ICBA, CBAI, other state and regional community bank associations and all of our member banks have been working vigorously to expand the FDIC assessment base to ensure the largest and riskiest banks pay appropriate premiums. Tester, Hutchison and Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said on the Senate floor that community banks did not cause the recent financial crisis and should not be penalized with higher deposit-insurance premiums. Hutchison noted that community banks currently pay 30 percent of all FDIC premiums while holding only 20 percent of the nation's banking assets. The House financial regulatory reform bill that passed in December also includes a similar provision that was sponsored by Congressman Luis Gutierrez (D-Illinois) and Congressman Donald Manzullo (R-Illinois).

CBAI thanks Senator Burris and Congressmen Gutierrez and Manzullo for sponsoring this important measure. We also thank Senator Durbin for supporting the amendment.

This is a great victory, but we must continue to push pro-community bank amendments and oppose harmful amendments. This victory would not have been won without the grassroots efforts of Illinois community bankers and community bankers throughout the nation. We need to remain diligent throughout this process. We will keep you informed.