ICBA Expresses Concerns about Large Bank Mergers

The community bank oriented Independent Community Bankers of America is concerned about the implications of large bank mergers on the industry.

"These mergers have enormous public policy implications. First, the trillion dollar banks that will result from these megamergers will be too big to regulate effectively," said Ken Guenther, President of ICBA. "Secondly, these banks will be too big to fail and therefore will pose a systemic risk to the FDIC's Bank Insurance Fund."

Guenther also predicts that, following these mergers, the largest banks will attempt to amend the Riegle-Neal Interstate Banking and Branching Efficiency Act which prohibits a bank merger if the resulting bank would control more than 10 percent of the deposits in the United States. "Community banks will resist any attempt to increase the 10 percent cap imposed by the Riegle-Neal Act or to broaden the definition of "deposit" under that Act," said Guenther.