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From: Tawana Carter
Sent: Tuesday, November 04, 2008 3:14 PM
To: Comments
Subject: CALL TO ACTION Proposed Rulemaking on Risk-Based Assessments
and the Designated Reserve Ratio for 2009
Tawana Carter
Midway, FL 32343-2673
November 4, 2008
Robert E. Feldman
Federal Deposit Insurance Corporation
550 17th Street NW Attention: Comments/RIN 3064-AD
Washington, DC 20429
Dear Robert Feldman:
As a Florida banker, I would like to comment regarding the FDIC's
proposal to increase deposit insurance premiums. We appreciate the
opportunity to address the issues raised by this request for comment.
These are extraordinary economic times, and it is important to make sure
that sound policy choices are implemented.
The recent adoption of the $700 billion economic stabilization plan had
one central theme: freeing up credit and preventing this country from
suffering an economic shutdown. The goal was to make sure that the needs
of Main Street were addressed along with those of Wall Street.
In these times, the FDIC should not disrupt the business practices of
healthy institutions. Government officials and commentators agree that
liquidity risk is the most significant challenge facing the banking
industry today. It is vitally important not to harm the institutions that
provide liquidity, which often are institutions so important to Main
Street.
Instead of adopting this proposed rule, we believe the FDIC could better
achieve its policy goals by taking these steps: The FDIC should utilize
its extraordinary circumstances authority to extend the time period to
rebuild the FDIC fund from five to ten years. This will limit unnecessary
stress on insured depositary institutions.
The FDIC should establish new premium schedule at the end of 2009. This is
a more prudent timeframe to establish a new premium schedule given the
current environment and the temporary emergency actions taken by the
government that will expire in 2009.
Advances from Federal Home Loan Banks are a vital source of liquidity for
our members. FHLBank advances provide banks with access to reliable and
stable low-cost funding. For many banks, FHLBank advances are the
lifeblood of their credit. This helps our banks serve the credit needs of
their communities, support homeownership, and assist local community
development. Anything that would penalize the use of advances would
thwart the efforts by the Treasury, Congress and the Federal Reserve to
restore liquidity to the credit markets.
Certain provisions in the regulations would increase deposit insurance
premiums and levy even higher premiums associated with the use of FHLBank
advances. These proposed increases would make lending money more expensive
just at a time when the national goal is to lower the cost of borrowing.
It would be counterproductive, in this economic atmosphere, to make it
harder for banks to function by raising their cost of doing business. Many
institutions would extend less credit in their communities, which would
harm those communities and the broader economy as a whole. We encourage
you to carefully reexamine this proposal and withdraw the proposed higher
premium on the use of FHLBank advances.
Thank you for the opportunity to comment about the proposed FDIC
regulation.
Sincerely,
Tawana Carter
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Last Updated 11/05/2008 | Regs@fdic.gov |