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IBAA URGES CLINTON TO SUPPORT ASSESSMENT OF FOREIGN DEPOSITS

 WASHINGTON, Jan. 6 /PRNewswire/ -- The Independent Bankers Association of America (IBAA) urged President-elect Clinton to consider the assessment of deposit insurance premiums on foreign deposits and non-deposit liabilities -- a measure that meets the test of fairness and deficit reduction that has been emphasized during the campaign and transition.
 "For years, the IBAA has advocated this policy change as a means of addressing the unfairness of the government's too-big-to-fail policy, " wrote IBAA president Robert Hawkins, chairman of the Southern Commercial Bank, St. Louis. "We have demonstrated that the assessment of foreign deposits and non-deposit liabilities could raise substantial revenue for the FDIC, while simultaneously lowering the budget deficit," Hawkins added.
 Hawkins noted that two recent cases decided by the U.S. Supreme Court reinforced the IBAA position. In both instances, Citibank was not relieved of its obligation to pay off its foreign depositors in New York, although its foreign branches had been closed by foreign governments. Citibank argued that foreign deposits were exempt from federal deposit insurance assessments and they should not be required to pay. The court did not agree.
 These rulings are additional evidence that the foreign deposits of the nation's largest banks are liabilities of the Bank Insurance Fund and ultimately the taxpayer.
 "U.S. banks have over 800 branches in 71 foreign nations with about $300 billion in outstanding deposit obligation. In addition, money center and other large banks carry approximately $385 billion in non-deposit liabilities on their books," Hawkins wrote. "The FDIC -- and the Treasury -- could realize nearly $770 million by assessing foreign deposits in 1993, and an additional $975 million by assessing non-deposit liabilities, or a total of $1.75 billion.
 "Fairness and sound fiscal policy would be well served if immediate action were taken to assess FDIC insurance premiums against foreign deposits and non-deposit liabilities," Hawkins concluded.
 The IBAA is the only national trade association which exclusively represents the interests of the nation's community banks.
 -0- 1/6/92
 /CONTACT: Diane Casey of the Independent Bankers Association of America, 202-659-8111/


CO: Independent Bankers Association of America ST: District of Columbia IN: FIN SU:

TW -- DC007 -- 2090 01/06/93 09:31 EST
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Date:Jan 6, 1993
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