From: Roger M. Hansen
[mailto:roger@lawlerbk.com]
Sent: Friday, April 02, 2004 5:35 PM
To: Comments
Subject: Comments on CRA Revisions
Roger M. Hansen
2320 South LInn Ave
New Hampton, IA 50659
April 2, 2004
Dear FDIC:
Increasing the asset size of banks eligible for the small bank CRA
exam from $250 million to $500 million and eliminating the holding
company size limitations will go along way in reducing the regulatory
burden of many small banks, including my institution. It is ridiculous
to compare a bank with a few branch locations and total assets of $250
million to a bank with hundreds of locations and billions of dollars in
assets under the same exam process. Small banks simply do not have the
resources (money, manpower, technology) to compete with these large
institutions under the large bank test. To many times a community bank,
that has served its local community well, is not afforded the
recognition it deserves simply because it is compared with huge
multi-million dollar organizations. Just as the community investment
abilities of small and large banks differ, so do the needs of the small
and large communities they serve. The ripple affect of smaller dollar
projects in a rural community may far outweigh a multi-million dollar
investments’ impact a metropolitan area, yet the small community bank’s
CRA rating often does not reflect this.
The reporting requirements under the large bank CRA exam process are
staggering for a small bank. Under the current rules, due to our state’s
rural population an institution may not be a HMDA reporter because it is
not located in a MSA, could still be subject to the large bank CRA test
and data collection due solely to having assets in excess of $250
million. While community banks still must comply with the general
requirements of CRA, this asset-size increase will eliminate some of the
most problematic and burdensome elements of the current CRA regulation.
I also support the elimination of the bank holding company asset size
threshold. Many banks maintain their own charter, management and
operational processes when purchased by a large holding company. They
“inherit” the regulatory requirements of the holding company but do not
always benefit from the holding company’s resources for complying with
these requirements.
Today’s community banks are drowning in regulatory red tape,
utilizing valuable resources to meet regulatory compliance mandates that
could be put to much better use for economic and community development
purposes in the communities they serve. Thank you for recognizing this
and proposing the changes to the Community Reinvestment Act.
Sincerely,
Roger M. Hansen
