ICBA, state groups to FDIC: Withdraw corporate governance proposal

ICBA and state community banking associations expressed strong opposition to the FDIC’s proposed corporate governance and risk management guidelines for covered institutions with $10 billion or more in assets.

Details: In a joint letter to the FDIC, the groups said the proposal:

• Applies a much lower asset threshold than Federal Reserve and OCC corporate governance standards, disadvantaging FDIC-supervised institutions.

• Provides the FDIC full discretion to suddenly apply the same corporate governance standards expected of the nation’s largest banks to community banks of any size, without sufficient notice or an implementation period.

• Is more prescriptive than the Fed and OCC corporate governance rules that apply only to the largest banks, contradicting the FDIC’s claims that the proposal is tailored based on size and complexity.

• Would make attracting directors extremely difficult for community banks, particularly in rural areas.

• Should be substantially modified or withdrawn, with corporate governance and board duties remaining in the hands of chartering authorities.

Grassroots Campaign: ICBA thanks the community bankers who submitted comments to the FDIC expressing concerns with the proposed standards as part of ICBA’s grassroots campaign.