Letters to the Editor
From our weekly issue dated March 25, 2009
(Editor’s Note: Views and commentary, including statements made as fact, are strictly those of the letter-writers.)
Typed, double-spaced letters are considered for publication. Hand-written letters that are double-spaced and legible also can be considered. “Thank you” submissions are not accepted as letters.
Punishing the solvent
From Tim Wallace
Selma
The recent FDIC premium increase is punishing solvent banks to pay for the mistakes of the bad banks.
I’m rather concerned. My community bank (Home Valley Bank/HVB) is soliciting its customers at the counter, and the bank president has run a full-page ad in the Grants Pass Daily Courier requesting customers to write their congressman, as the bank’s annual FDIC insurance premium has increased 1,000 percent.
The HVB FDIC premium is going up from $119K to $1.3M, which will affect its business expenses significantly and interest rates payable to customers.
Several articles I’ve read on this subject are saying that this is supposed to shore up the FDIC safety reserve fund. Some articles comment that the FDIC didn’t even collect premiums from 1996 to 2006 as it thought the interest on the reserves would cover the premiums -- until 25 banks failed last year. Another 14 banks have failed so far this year -- two in Oregon.
The bank president has written to share that Oregon banks are required by state law to maintain FDIC insurance. If the FDIC is headed for trouble, it may be time for Oregon banks to request the state Legislature to allow them to insure themselves.
In the meantime, I think that people should do all they can to stop the FDIC from punishing the solvent banks by writing their congressman and state legislators.
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