KECI: Tester introduces bipartisan amendment to Wall Street reform plan to ensure fairness for rural banks
(GREAT FALLS, Mont.) — Senator Jon Tester 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.
Tester’s amendment would direct the FDIC to implement risk-based assessments when deciding how much a bank should pay in premiums, so that larger and riskier banks pay an appropriate amount.
