WASHINGTON -- Community bankers are saying they would be hurt by a Clinton administration proposal to give the Federal Deposit Insurance Corp. preference over uninsured depositors when dividing the assets of failed banks.

The proposal, aimed at reducing the budget deficit, would ensure that the amount of customer's deposits in excess of $100,000 at small banks would be wiped out, said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. Consumers, he said, would still perceive large institutions as "too big to fail" safe havens.

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