ICBA to FDIC: Exempt Community Banks from Special Assessment

Washington, D.C. (April 14, 2023) — The Independent Community Bankers of America (ICBA) today called on the Federal Deposit Insurance Corporation to completely exempt community banks from any special assessment to recover Deposit Insurance Fund losses caused by the failures of Silicon Valley Bank and Signature Bank of New York.

In a letter to FDIC Chairman Martin Gruenberg, ICBA President and CEO Rebeca Romero Rainey said large banks should pay for the special assessment because they are the chief potential beneficiaries of these two receiverships and the FDIC’s decision to cover any losses of their uninsured depositors.

“Community banks and their customers shouldn’t have to pay for the miscalculations and speculative practices of large financial institutions like SVB and Signature,” Romero Rainey wrote. “If any assessment increase is warranted, it should be imposed on the institutions that pose the most risk to the DIF—not community banks.”

In her letter, Romero Rainey cited Gruenberg’s congressional testimony affirming the Federal Deposit Insurance Act provides the FDIC much discretion regarding the design and timeframe for any special assessment and requires the agency to consider the types of entities that benefit from its actions. Romero Rainey also cited a January 2023 ICBA letter to the FDIC warning that large financial institutions rely on high concentrations of uninsured deposits — unlike relationship-focused community banks — reflecting why these larger and riskier entities should pay significantly more for deposit insurance.

ICBA has said since the immediate aftermath of the SVB and Signature failures that Washington’s response should not affect the community banks that continue to appropriately manage risk and do right by their customers. It supports the White House announcement calling on the FDIC to ensure the costs of replenishing the DIF are not borne by community banks and looks forward to working with the FDIC to ensure it uses its authority to exempt community banks.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding $5.8 trillion in assets, $4.8 trillion in deposits, and $3.8 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers' dreams in communities throughout America. For more information, visit ICBA's website at www.icba.org.

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