U.S. Sen. Jon Tester, D-Mont., is introducing a bipartisan amendment to the Senate’s Wall Street reform plan to make sure rural banks are not forced to pay more than their fair share for federal bank insurance.
The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000. As the recession has forced hundreds of banks to close their doors, the FDIC’s resources have become strained. To ensure continued federal insurance, banks are being slammed with rising assessment costs by the FDIC.
Small community banks are being disproportionately affected by these costs, even though none of Montana’s community banks or credit unions have failed during the financial crisis. Currently, community banks pay 30 percent of all FDIC premiums while holding only 20 percent of the nation’s banking assets.
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“Our economy collapsed almost two years ago because there were no referees keeping tabs on Wall Street’s reckless behavior,” said Tester, a member of the Senate Banking Committee. “Now we have a plan to put those referees back on the field. But we need to make sure small rural banks – that played by the rules and didn’t cause this crisis – aren’t paying for the risky behavior of big Wall Street banks. My role in the Wall Street reform debate is to look out for Montana’s and America’s rural banks, and this amendment does exactly that.”
“We are grateful to Sen. Tester for his sponsorship of this amendment. Community banks, in Montana and across the nation, have sent a lot of money out of their communities and out of their states to pay higher FDIC premiums for losses sustained by other banks,” said Steve Yeakel, executive director of the Montana Independent Bankers. “This amendment assures that the assessment base will be fairer. It is a top priority for MIB members. The amendment is an important step toward a level playing field for all banks.”
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