Considering the cost of TAG and the alternative forms of insurance available, there is no economic reason to extend it. And when you guarantee transaction balances, you are really helping large banks.
The cycle of bank in organization, to community bank, to acquisition target, and back to bank in organization has been interrupted over the last three years with no apparent relief in sight.
As a state regulator who witnessed firsthand the role the TAG program has played in ensuring financial stability, I encourage Congress to continue TAG for at least two years.
Unless there is a hidden Washington agenda to eliminate community banks as trouble-prone or hard to regulate, it is time to rethink the limitations and criteria required for new applicants.
Congress should repeal Sarbanes-Oxley to increase the flow of equity capital to micro- and small-cap public companies. Lawmakers also must increase the allotment for the SBA 7a program and guarantee it exists for the next three years.
Much like community banks bearing the burden of overregulation designed for the megabanks, small credit unions are being sucked into the perilous efforts of their much-larger counterparts.
I wish that I could agree with Ms. Rehm's point of view on ending the Transaction Account Guarantee program because, if I could, it would signal the end of the very discriminating too-big-to-fail policies of our government.
Allowing credit unions to bring in investor capital will, in effect, make them identical to any other for-profit corporation that issues debt and stock - except that they will keep their tax-free status.
In an improving economy, many of the policies and procedures that were imposed on banks in 2008 have become counterproductive, and are hurting rather than helping the industry.
