Since [the failure of SVB], ICBA has been the sole national voice representing community banks exclusively to ensure they would not have to pay for the mistakes of large banks. Anne Balcer is ICBA senior executive vice president, chief of government relations and public policy. Romero Rainey cited Gruenberg’s congressional testimony that the FDIC has discretion over the design and timeframe of special assessments under the Federal Deposit Insurance Act and how it was required to consider the types of entities that benefit from its actions. “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.” ICBA had allies supporting this view. The Biden administration called on the FDIC to ensure the costs of replenishing the DIF were not borne by community banks. Supporting a Community Bank Exception When the FDIC released its notice of proposed rulemaking for the special assessments, it reflected ICBA’s viewpoint, exempting community banks with less than $5 billion in assets. It also tied an institution’s special assessment to its estimated uninsured deposits. ICBA applauded the FDIC’s proposal in a July 2023 comment letter, encouraging the agency to finalize the proposal as-is. Community bankers added their letters of support through an ICBA grassroots advocacy campaign. More than 80% of the more than 230 letters submitted to the ICBA came from ICBA members. This united chorus of individuals contrasted with groups representing larger institutions, which were neutral or opposed to the FDIC’s proposed approach for calculating the assessment. In the end, the FDIC board of directors voted 3-2 to finalize the rule with the ICBA-supported exemption for most community banks. ICBA was the only national trade association to call for a community bank exemption from the special assessment, and we will continue educating the public, policymakers and the press about the value of community banks. 18 In Touch
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