ICBA Fires at ‘Too Big to Fail’ in New Report

A new ""report"":http://www.icba.org/files/ICBASites/PDFs/EndTBTFStudy.pdf from the ""Independent Community Bankers of America"":http://www.icba.org/ (ICBA) calls for an end to the ""too-big-to-fail"" banking culture the group says has been destructive to the American economy.

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According to ICBA's report--titled simply ""End Too-Big-To-Fail""--the nation's 12 largest banks hold nearly 70 percent of industry assets, ""dwarfing the rest of the banking system and representing massive systemic risk.""

Citing remarks from Eric Holder in which the attorney general admitted some institutions have ""too much influence"":https://themreport.com/articles/attorney-general-draws-criticism-for-too-big-to-jail-remarks-2013-03-08 in the global economy for them to be prosecuted, ICBA asserts that large banks use their estimated $83 billion annual subsidy to ""unfairly compete, profit and grow even larger, exacerbating industry consolidation.""

While banks now have to contend with increased regulation as a result of the fallout of the economic crisis, ICBA says the new guidelines are ""nearly unworkable for community banks,"" further exacerbating the problem.

""As we outline in the report, too-big-to-fail distorts free markets, incentivizes risky behavior, holds taxpayers hostage to bailouts, and creates unfair competitive advantages for the largest banks,"" said ICBA president and CEO Camden R. Fine. ""But there is perhaps no greater reminder of the too-big-to-fail impact than the constant, oppressive regulatory burdens that community banks face on a daily basis.""

In its efforts to end too-big-to-fail, ICBA endorsed the ""Terminating Bailouts for Taxpayer Fairness Act of 2013"":http://www.govtrack.us/congress/bills/113/s798, a debated bill introduced by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-Louisiana) that establishes its own minimum capital requirements.

""Banks should exist to serve the economy, to provide the credit and other financial services that help launch and expand businesses and create new jobs,"" ICBA said in the report. ""A robust market for financial services helps consumers obtain home mortgages and other loans at competitive rates and on customized terms. When banks compete freely, consumers have access to a range of solutions for savings and investment.""