Washington, D.C. (May 1, 2023)— Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on the closure of First Republic Bank—the latest large financial institution to fail due to risky behavior.

“It’s sad to see any bank fail and for depositors to suffer uncertainty about the safety of their deposits, which is why it is important to learn from the failure of First Republic Bank. First Republic, which had nearly $230 billion in assets as of April 13, operated a risky business model that depended on large quantities of uninsured deposits—which looks nothing like the relationship-based model of the nation’s community banks.

“ICBA reminds consumers that they can bank with confidence at their local community bank because they are relationship lenders that are vested in their local communities and built for longevity, with depositor funds insured by the Federal Deposit Insurance Corp. FDIC deposit insurance covers each depositor's account, dollar-for-dollar, up to the insurance limit. Since the FDIC was founded 90 years ago, no one has ever lost a penny of FDIC-insured funds. If customers have questions about deposit insurance, they should reach out to their community banker for assistance.

“FDIC data show the community banking industry remains safe, sound, and secure. According to the FDIC’s most recent Quarterly Banking Profile, community banks’ asset quality is favorable and capital ratios are strong.

“To ensure the nation responds appropriately to recent developments, policymakers must distinguish large, risky banks from the community banks that serve local consumers and small businesses. Given these vastly different banking models, Washington should ensure any response to recent closures at larger institutions does not affect the community banks that continue to do right by their customers and hometowns, as advocated by the White House.

“As stated by FDIC board member Jonathan McKernan on the First Republic failure, policymakers should ‘avoid the temptation to pile on yet more prescriptive regulation or otherwise push responsible risk taking out of the banking system.’

“ICBA will continue educating the public about the stability of the community banking industry and its time-tested business model. It also will continue to oppose any effort to require these locally focused banks to bear financial responsibility for losses to the Deposit Insurance Fund caused by larger and riskier institutions.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding $5.8 trillion in assets, $4.8 trillion in deposits, and $3.8 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers' dreams in communities throughout America. For more information, visit ICBA's website at www.icba.org.