Begich Co-Sponsors Amendment to Protect Smaller Banks
Measure designed to protect community banks from paying more than their fair share
Smaller, community banks will be protected from paying more than their fair share for federal bank insurance under an amendment passed overwhelmingly today by the U.S. Senate. The amendment, co-sponsored by U.S. Sen. Mark Begich, was adopted by a vote of 98-0.As the Senate continues debating the Wall Street reform bill, the amendment changes the way the Federal Deposit Insurance Corporation (FDIC) calculates premiums paid by banks into the fund. Under the new system, banks would pay based on total assets rather than deposits, protecting smaller community banks and credit unions like many in Alaska. “Alaska’s community banks should not be penalized for the bad deeds of Wall Street and the big banks that brought our economy to near catastrophe,” Begich said. “This amendment will help protect those who are playing by the rules and make sure those with bigger assets who are taking bigger risks pay for it.” Currently, community banks pay 30 percent of all FDIC premiums while holding only 20 percent of the nation’s banking assets. Under the amendment passed today, the FDIC is required to implement risk-based assessments when deciding how much a bank should pay in premiums. Those with larger asset holdings would pay a larger amount in deposit insurance premiums. The amendment was supported by the Independent Community Bankers of America who called it a victory for community banks and stated the change would reduce the assessments of about 98 percent of banks with less than $10 billion in assets. The amendment was sponsored by Sen. John Tester (D-MT) and had 15 co-sponsors, both Republicans and Democrats.