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IBAA URGES REGULATORS TO ACT 'WITH RESTRAINT AND REASON'

 IBAA URGES REGULATORS TO ACT 'WITH RESTRAINT AND REASON'
 SAN ANTONIO, Feb. 11 /PRNewswire/ -- In an expression of their deep concern about the evolving regulatory and legislative climate, the nation's community bankers called upon the nation's top regulators to act "with reason and restraint."
 A special resolution, "Bank Regulation and Economic Growth," was adopted by the Independent Bankers Association of America (IBAA) board of directors and presented to Federal Reserve Board Chairman Alan Greenspan, FDIC Chairman William Taylor and Comptroller of the Currency Robert Clarke. The resolution urged "policy makers to better recognize that our national economy is a reflection of local and regional economies that are supported by community banks and that the growth of these local economies will strengthen the national economy."
 In itsInsurance Corporation Act of 1991 (FDICIA) "with restraint and reason." The chief executives of the three agencies are all speaking before the nation's community bankers during a three-day convention.
 President Bush, in his State of the Union address, recognized the problem posed by excessive regulation when he said that "regulatory overkill must be stopped." However, IBAA noted in its resolution, the administration's legislative agenda continues to promote the concentration and consolidation of the financial system to the detriment of community banking.
 "In particular, we very much regret that the administration continues to advocate measures that would erode the deposit base of community banks," the resolution stated. "Such proposals only serve to decrease bank lending to small business, agriculture and Main Street America."
 The IBAA resolution calls upon the regulatory agencies to promptly recommend the repeal of those provisions of the act that are unworkable or that represent a significant, unwarranted regulatory burden to community banks. For example, the FDICIA provision giving the regulators the power the control executive compensation for healthy banks "will discourage talented individuals from pursuing banking careers and it should be repealed," the resolution noted. "Regulatory agencies should play a leadership role in persuading the Congress to remove this unwarranted interference in the private sector."
 The resolution also urged the Securities and Exchange Commission to withdraw its support of market-value accounting. "Adoption of this would be a major disincentive to making community-based loans and purchasing local municipal bonds because of cost and balance- sheet fluctuations," the resolution said.
 IBAA asked the regulatory agencies to take the following additional steps:
 -- Continue to encourage field examiners to exercise flexibility and prudent judgment in bank examinations;
 -- Avoid placing undue reliance on appraisals as the sole measure of credit quality of commercial loans;
 -- Provide exemptions for small banks from unnecessary and inappropriate paperwork burdens where they have the discretion;
 -- Seek legislative exemptions from burdensome regulations for small financial institutions;
 -- Adopt an effective regulatory appeals process, as recommended by the president, that assures banks of their constitutional rights of due process;
 -- Adhere to the spirit of existing laws intended to limit the paperwork and compliance burdens, specifically the Paperwork Reduction Act and the Regulatory Flexibility Act; and
 -- Support the efforts to amend state and federal Superfund and other environmental laws to provide protection from environmental lender liability for lenders acting only to protect their investments.
 IBAA is the only national trade association that exclusively represents the interests of the nation's community banks.
 -0- 2/11/92
 /CONTACT: Kenneth A. Guenther or Diane Casey, 512-554-6242, in San Antonio; or Jan Walton, 202-659-8111, in Washington, all of the Independent Bankers Association of America/ CO: Independent Bankers Association of America ST: Texas IN: FIN SU: LEG


DC -- DC008 -- 8747 02/11/92 11:06 EST
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Date:Feb 11, 1992
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