Bankers’ Bank
of the West
September 13,
2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold
for the Small Bank CRA Streamlined Examination
Dear Mr. Feldman:
My name is Roger
R. Reiling, President/CEO of Bankers’ Bank
of the West, Denver, Colorado. We are a bankers’ bank and although
we are exempt from CRA, we are a correspondent bank who has relationships
with over 400 community banks in nine states, I am writing to support
the FDIC’s proposal to raise the threshold for the streamlined
small bank CRA examination to $1 billion without regard to the size
of the bank’s holding company. Many of our calls on the community
banks evolve into discussion on the tremendous burden in terms of
cost and time of man hours the current regulation imposes. To our
knowledge without exception these banks are and have always been
ready to meet the credit needs of their entire community. Under your
new proposal, community banks would still be required to help meet
the credit needs of their communities and would continue to be evaluated
by their regulator.
We also support
the addition of a community development criterion to the small
bank examination
for larger community banks, but believe
that the FDIC should adopt its original $500 million threshold without
a Community Development standard. The new Community Development standard
should be applied only to banks greater than $500 million up to $1
billion. As your examiners have found, it is difficult for small
banks, especially in rural areas, to find appropriate CRA qualified
investments in their communities. To often we have seen small banks
make investments that are extremely unlikely to benefit the banks’ own
community. We do not think that was the intent of Congress when it
enacted CRA.
Another reason
to support the FDIC’s criterion is that when
the small banks go over the $250 million level, they must completely
reorganize their CRA program with a new reporting, monitoring and
investment program. Should the FDIC adopt its proposal, a state nonmember
bank would move from the small bank examination to an expanded but
still streamlined small bank examination, with the flexibility to
mix Community Development loans, services and investments to meet
the new Community Development criterion. This would be far more appropriate
to the size of the bank, and far better than subjecting the community
bank to the same large bank examination that applies to $1 trillion
banks.
We would strongly
support the FDIC’s proposal to change the
definition of “community development” from only focusing
on low and moderate-income area residents to including rural residents.
I think that this change in the definition will go a long way toward
eliminating the current distortions in the regulation.
In conclusion, I believe that the FDIC has proposed a major improvement
in the CRA regulations, one that much more closely aligns the regulations
with the Community Reinvestment Act itself, and I urge the FDIC to
adopt its proposal, with the recommendations above. I will be happy
to discuss these issues further with you, if that would be helpful.
Sincerely,
Roger R. Reiling
President/CEO
|
