ICBA responded to FDIC guidance designed to help relieve many community banks structured as Subchapter S corporations from rules that would limit their ability to raise capital. The guidance encourages community banks to request case-by-case exceptions to the Basel III capital conservation buffer, which curtails capital distributions, such as shareholder dividends, when regulatory capital levels fall below preset thresholds. While the FDIC did not implement the ICBA-advocated exemption for Subchapter S banks to pay dividends to their shareholders to meet their corporate tax obligations, the association said it is encouraged the agency is listening to community bankers. In a February letter to the federal banking agencies, ICBA recommended that the agencies amend the buffer to allow S-corp community banks to distribute at least 35 percent of their reported net income for a reporting period. ICBA will continue pursuing a legislative solution.