Independent Banker - July 2023 - 37

after the second and third largest
bank failures in U.S. history.
A typical crisis would require
conference calls to coordinate
logistics. With the majority of
the nation's community bankers
gathered in one hotel, they were able
to confer and act in real time.
Reassurance and differentiation
ICBA's government relations team
quickly sprang into action, engaging
in emergency meetings with bankers,
staff, lobbyists and regulators.
Recognizing that a special FDIC
assessment was imminent, ICBA
asserted that community banks
should not have to pay for the sins
of the largest banks. ICBA argued
that the responsible management
of community banks should not be
overshadowed by the poor practices
of the big players-the only national
trade association to advocate
this position.
The phone calls from congressional
staff, Senate offices, committee
staff and leadership offices began
immediately after Signature Bank
collapsed. Having long relied on ICBA
for insights into banking, the economy
and Main Street, they wanted to
know if community banks would
remain safe and sound. ICBA staff and
bankers reassured that community
banks remained strong, with no
run on deposits. They also went on
the offense to gain allies in the fight
against a potential special assessment
levied against community banks
whose prudent stewardship stood in
contrast with the risky behavior that
led to the big-bank failures.
The fight continues
The effort continued after
community bankers flew home with
grassroots efforts playing a key
role. Community bankers maintain
excellent relationships with both
" Community banks and their
customers shouldn't have to
pay for the miscalculations and
speculative practices of large
financial institutions like SVB
and Signature. "
-REBECA ROMERO RAINEY, ICBA
regulators and legislators. Leveraging
these relationships while using tools
such as the ICBA Grassroots Action
Center (icba.org/takeaction) to send
messages and engaging with the
media allowed community bankers
to effectively share their message and
ensure it was heard by those who
needed to hear it.
The state associations also
played a crucial role in supporting
ICBA's efforts. Their involvement
added a local voice that amplified
ICBA's lobbying.
ICBA's message was heard. In
Senate and House hearings in
late March, members of Congress
repeatedly asked FDIC chairman
Martin Gruenberg about the
possibility of an exemption for
community banks. Noting that the
FDIC can tailor the special assessment
as it sees fit, Gruenberg said the FDIC
is " keenly sensitive to potential impact
on community banks. "
On March 30, President Biden
released a statement calling on the
FDIC to ensure community banks
would not be required to bear the
costs of replenishing the DIF. ICBA
thanked the White House for its
support and sent a letter to the FDIC
urging that it use discretion.
" Community banks and their
customers shouldn't have to pay for
the miscalculations and speculative
practices of large financial institutions
like SVB and Signature, " ICBA
president and CEO Rebeca Romero
Rainey wrote. " If any assessment
increase is warranted, it should be
imposed on the institutions that
pose the most risk to the DIF-not
community banks. "
ICBA claimed victory for community
banks on May 11 when the FDIC
proposed to fully exempt community
banks under $5 billion in assets from
the assessment. ICBA commended the
FDIC for the proposal, which shields
the majority of ICBA members.
ICBA's efforts to protect community
banks from paying for the mistakes
of larger, riskier banks highlights
the value of a trade association that
exclusively represents the interests of
community banks. ICBA acted swiftly
with a clear and decisive message that
recognized the likelihood of a special
assessment and the potential impact it
would have on community banks. It's
a powerful reminder of the power of
collective action and effective advocacy
at play in safeguarding the interests of
community banks.
Stephen Keen (steve.keen@
icba.org) is vice president,
congressional relations
independentbanker.org // 37
http://www.icba.org/takeaction http://www.independentbanker.org
Independent Banker - July 2023

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