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IBAA ISSUES STATEMENT ON FDIC'S DEPOSIT INSURANCE PREMIUM INCREASE

IBAA ISSUES STATEMENT ON FDIC'S DEPOSIT INSURANCE PREMIUM INCREASE
 WASHINGTON, May 12 /PRNewswire/ -- The Independent Bankers Association of America issued the following:
 The FDIC's action to increase deposit insurance premiums to 28 cents per $100 in domestics deposits will hurt the profitability of many banks across the country and decrease their ability to lend. FDIC justified its action as necessary to achieve a better match of its revenues and expenses.
 However, FDIC staff presented a proposal to the board which reflected great uncertainty, setting forth numerous assumptions that needed to be considered to select the "right" premium to achieve this goal. The broad range presented to the board is conclusive evidence that no one, including the FDIC, knows what the right number is for the BIF to meet its target ratio in 15 years. While we commend the board for not selecting the high end of 30 basis points, 28 basis points may also be too high and unfairly strain an industry that is just beginning to participate in the economic recovery.
 We are pleased that FDIC Chairman William Taylor and the FDIC board of directors agreed to seek public comment on a risk-based premium system, recognizing that the current flat rate structure unjustly penalizes healthy, well-capitalized banks. We are disappointed that this detailed proposal fails to seek any comments on the current narrow assessment base of domestic deposits alone.
 The Independent Bankers Association of America (IBAA) is the only national trade association which exclusively represents the interests of the nation's community banks.
 -0- 5/12/92
 /CONTACT: Diane Casey of the Independent Bankers Association of America, 202-659-8111/ CO: Independent Bankers Association of America; Federal Deposit
 Insurance Corporation ST: District of Columbia IN: FIN SU:


MH-TW -- DC026 -- 9175 05/12/92 13:17 EDT
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Publication:PR Newswire
Date:May 12, 1992
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