Isakson Fights for Georgia Banks

Meets With Federal Regulators to Demand Answers

Mar 05, 2009

WASHINGTON – U.S. Senator Johnny Isakson, R-Ga., today met with federal bank regulators to demand answers for Georgia banks that are struggling through harsh economic times.

Isakson met with officials from the Department of Treasury, Federal Reserve, FDIC, Comptroller of the Currency and the Office of Thrift Supervision to discuss how the lack of information available to Georgia banks regarding their applications for the Troubled Asset Relief Program is negatively effecting those banks.

“Georgia banks are being left in the dark by the federal government concerning the TARP funds and regulators are aggravating an already complex situation,” said Isakson. “There must be more transparency in this process and I wanted to make sure the federal government understands the difficulty Georgia’s banks are facing.”

Isakson also explained that if the FDIC goes through with its plan to impose a one-time, $15 billion increase in insurance fees collected from the nation’s banks, it will cause considerable stress for already-struggling Georgia banks.

Isakson also brought up mark-to-market accounting rules at the meeting and argued that these rules are disproportionately penalizing the people he serves. Isakson believes that mark-to-market rules should be replaced with a mechanism of amortization or “smoothing” to absorb the assets over time. This will allow the absorption of those assets over time to be more reflective of reality and less reflective of the dire straits that our nation is currently in today.

“This is devastating to our bankers as real estate is absorbed over time and not in one fell swoop. Mark-to-market should not be an arbitrary write-down to zero, it should be a recognition of the transition of values in a down market or in an up market,” Isakson said. “This issue hits at the heart of residential real estate construction lending thereby further crippling our economy from returning to a prosperous nation.”