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 March 21, 2005 #05-09
E-mail: [email protected]

ACB URGES FDIC TO RAISE FDICIA LIMIT TO $1 BILLION

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WASHINGTON, D.C. – America’s Community Bankers has urged the FDIC to reduce the cost and resource burden on small, privately owned and mutual banks by increasing the Federal Deposit Insurance Corporation Improvement Act limit to $1 billion.

Currently, non-public banks with less than $500 million in assets are not subject to the FDIC’s external annual audit and reporting requirements, nor are they required to comply with the public company audit and attestation standards under the Sarbanes-Oxley Act’s section 404.

But as ACB explained in its letter to FDIC Chairman Donald Powell, “We have heard that many privately held and mutual banks with assets between $500 million and $1 billion continue to experience substantial audit fee increases coupled with serious strains on internal resources in light of the new public company standard, and in fact, some audit firms are de facto applying the standard.”

Without explicit and reasonable relief from the overwhelming costs and burdens of the Sarbanes-Oxley Act, ACB said retained earnings could be eroded and capital adequacy could be weakened, creating serious safety and soundness issues.

ACB is seeking a meeting with the FDIC to discuss the status of increasing the FDICIA limit and the potential for the banking agencies to advance relief for all banks from the Sarbanes-Oxley Act’s section 404.

The letter to Chairman Powell is attached.

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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