The community bank lobby's Minority Bank Council has come out insupport of extending the FDIC's transaction account tag insurance,saying that letting it expire would disproportionately affect theirconstituencies.

The council, part of the Independent Community Bankers ofAmerica, this week urged Congress to approve a proposed five-yeartemporary extension of the TAG insurance that it said fully covers$1.3 trillion in deposits.

“With so many other risks to the nation's economicrecovery, a premature expiration of TAG is an additional,unnecessary risk we should not take,” said the council's chairman,Guillermo Diaz-Rousselot of Continental Bank of Miami, and vicechairman, George Andrews of Capitol City Bank & Trust Co.

“The stakes are especially high for minority banks and thecommunities we serve,” they said in a letter to congressionalleaders.

The TAG insurance program was created during the 2008 financialcrisis to protect checking accounts used by businesses, localgovernments, hospitals and other non-profit organizations forpayroll and other recurring expenses. Unless extended, it expireson Dec. 31.

Diaz-Rousselot and Andrews noted in their letter that thecoverage does not require taxpayer funding, because it's paid forthrough FDIC insurance premiums, and said the TAG program hashelped the nation's 184 FDIC-recognized minority banks attractdeposits that support loans to small businesses and consumers.

Minority banks are either owned by minority individuals –African Americans, Asian Americans, Hispanic Americans or NativeAmericans – or have minority boards of directors and serve minoritycommunities.

“The institutions are tailored to the languages, customsand special financial needs of their communities. The loss of TAGcoverage will have a direct and adverse impact on the neighborhoodsserved by minority banks,” the ICBA said.