ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release May 7, 2002 #02-26
E-mail: [email protected]

ACB COMMENTS ON FDIC PREMIUM DECISION

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Statement by Diane M. Casey, president and CEO, America’s Community Bankers, on the prospect for premiums on Bank Insurance Fund deposits:

The Bank Insurance Fund remains on the brink of falling below the designated reserve ratio. While the FDIC decided today not to impose new premiums, it remains a real possibility in the future. Passing deposit insurance reform legislation now would remove the uncertainty and eliminate the specter of premiums.

Bankers should look at today’s FDIC decision as a reprieve, and as a wake up call to lobby the Congress for action now to maintain the integrity of the insurance system.

This legislation must, at a minimum: merge the two insurance funds into a single stronger fund, eliminating the need for premiums on healthy banks; impose a special fee on the high growth “free riders” that pay no premiums, thus addressing a major problem that has exacerbated the decline in the BIF reserve ratio; and give the FDIC the flexibility to recapitalize the insurance fund in a way that is not as disruptive as the industry faces today. And while coverage levels need to be addressed, it is critical that this one issue does not impede progress on deposit insurance reforms.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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