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ICBA Objects to Treasury as Head of Systemic Council

By Donna Borak, American Banker
March 5, 2010
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WASHINGTON — The Independent Community Bankers of America sent a letter Thursday to top Senate Banking Committee leaders raising concerns about rumored plans to name the Treasury Secretary as head of a proposed systemic risk council.

Although the trade group backed the creation of the council, it said putting Treasury in charge would introduce politics into banking supervision.

"The chairman must not be tainted by partisanship, which could be the case with the Treasury Secretary," wrote Cam Fine, president of the group. "Regulators should be objective, non-partisan and shielded from political influence."

Instead, the ICBA is suggesting the council be chaired either by the chairman of the Federal Reserve or revolved among the heads of regulatory agencies, which would be represented on the council.

Separately, the group also vigorously opposed any proposal to strip the Federal Reserve of its supervisory powers. Limiting its oversight to the largest banks would show a bias to the biggest financial institutions, the group said.