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FDIC Federal Register Citations


High Point Bank & Trust Company

September 8, 2004

Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
comments@fdic.gov

Re: FDIC – 12 CFR Part 345; Proposed Revisions to the Community Reinvestment Act Regulations; 69 Federal Register 51611; August 20, 2004

Dear Sir or Madam:

The Federal Deposit Insurance Corporation (FDIC) has proposed several amendments to the Community Reinvestment Act (CRA) regulations. The proposals include 1) raising the asset threshold for a “small bank” 2) adding a separate Community Development (CD) test and 3) revising the definition of “community development.” The above revisions would affect all FDIC insured financial institutions.

High Point Bank & Trust Company, founded in 1905, is located in High Point, North Carolina. It is a state chartered non-member bank, with assets of approximately $600 million. High Point Bank & Trust Company primarily serves the cities of High Point, Jamestown and Archdale, North Carolina and the surrounding counties of Guilford, Davidson, Forsyth and Randolph.

High Point Bank & Trust Company (the Bank) supports raising the asset threshold for a “small bank” from $250 million to $1 billion. The Bank also supports revising the definition of “community development” to include rural residents. However, the Bank does not support the creation of a separate CD test in addition to the small bank standard. A further discussion of the Bank’s position on the above mentioned proposals follows.

Raising the Asset Threshold for a “Small Bank” under CRA

High Point Bank & Trust Company strongly supports the FDIC’s proposal to increase the asset threshold of a “small bank” to $1 billion. As noted in the proposal, increasing the threshold to $1 billion would only decrease the percentage of industry assets held by large institutions by a very nominal amount. Requiring banks with assets of up to $1 billion to meet the same requirements of a much larger bank is very time-consuming and financially draining. It is also difficult for “small banks” to compete with “large banks” for investments within the same assessment area.

Creating a Separate Community Development Test

High Point Bank & Trust Company agrees that a community development criterion in the small bank examination standard for banks between $250 million and $1 billion is appropriate. This will allow evaluation of one or more of the bank’s community development activities including CD lending, services or investments. However, High Point Bank & Trust Company is strongly opposed to creating a separate community development test in addition to the small bank standard. We believe that such a test would create an additional community development obligation, not contained in the CRA. This obligation would become a focal point and actually detract from efforts to serve the whole community.

Changing the Definition of “Community Development”

The FDIC proposes changing the definition of “community development” to benefit not just low- and moderate-income residents, but also residents of rural areas. High Point Bank & Trust Company supports this change. We believe the change would encourage banks to invest within their assessment area and better meet the intentions of the CRA to benefit the community.

Conclusion

The proposals for change to the CRA discussed above will have a large impact on the banking industry, especially those banks that will change classifications from a “large bank” to a “small bank.” Changing the definition of a “small bank” to include all banks with assets up to $1 billion, allowing banks to determine how they will meet the community development criteria instead of imposing a separate test and including rural residents in the community development definition are all steps towards improved CRA regulations. Making the CRA requirements for “small banks” less burdensome will allow the banks to focus their resources on benefiting the community and, in so doing, meeting the intentions of the CRA.

Sincerely,

Charles L. Myers
High Point Bank & Trust Company
President and Chief Executive Officer


Last Updated 09/09/2004 regs@fdic.gov

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