FDIC Federal Register Citations

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