That said, emotions often ran high on both sides. A core issue here is the difficulty in attracting deposits, and they see increasing the level as the solution or a partial solution to that problem. Tom Sheehan, who was ICBA president at the time he wrote, and the Flannery study that ABA commissioned see community banks as likely to gain more deposits than larger institutions. But other community banks disagree, doubting that significant amounts would flow into their bank from uninsured, higher-yield accounts or from other banks. As with the privacy issue, the more you learn, the more difficult the issue becomes.
Cost is the big unknown.
To best represent the industry, we want to know the price we d all have to absorb and determine if we re willing to pay it. This week, the 175 bankers and state execs participating in ABA s spring summit meeting discussed the issue at length, as did the ABA Board. Clearly the need to increase funding is a top issue for almost every bank. All want a bill that can pass and is comprehensive enough to address the steady dilution of the insurance fund by fast-growing institutions that are paying no premiums, the issue of municipal deposit insurance, capping the funds and obtaining future rebates. In the next few weeks, we re going to be taking our views to Senate Banking Chairman Gramm, House Financial Services Chairman Oxley, Treasury Secretary O Neill and Fed Chairman Greenspan.