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FDIC Federal Register Citations

Citizens Bank Tri-Cities

March 29, 2004

Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: Community Reinvestment Act Regulations Dear Sir or Madam:

As a community banker, I strongly recommend the federal bank regulators' consider increasing the asset size of banks eligible for the small bank streamlined Community Reinvestment Act (CRA) examination to $2 billion, or at a minimum, $1 billion. This further increase from the proposed $500 million threshold will greatly reduce regulatory burden. I am the Chief Financial Officer and Chief Operating Officer of Citizens Bank, a $550 million asset regional institution based in Elizabethton, TN.

The small bank CRA examination process was an excellent innovation. As a community banker, I applaud the agencies for recognizing that it is time to expand this critical burden reduction benefit to some larger community banks. At this critical time for the economy, this will allow more community banks to focus on what they do best-fueling America's local economies. When a bank must comply with the requirements of the large bank CRA evaluation process, the costs and burdens increase dramatically. And the resources devoted to CRA compliance are resources not available for meeting the credit demands of the community.

Adjusting the asset size limit also more accurately reflects significant changes and consolidation within the banking industry during the last 10 years. To be fair, banks should be evaluated against their peers, not banks hundreds of times their size. The proposed change recognizes that it's not right to assess the CRA performance of a $500 million bank with the same exam procedures used for a $500 billion bank. Large banks now stretch from coast-to-coast with assets in the hundreds of billions of dollars. It is not fair to rate a community bank using the same CRA examination.

Ironically, community activists seem oblivious to the costs and burdens. In addition, they object to bank mergers that remove the local bank from the community. This is contradictory. If community groups want to keep the local banks in the community where they have better access to decision-makers, they must recognize that regulatory burdens are a significant factor in the decisions of smaller institutions to sell to larger institutions that can better manage the burdens.

Increasing the size of banks eligible for the small-bank streamlined CRA examination does not relieve banks from CRA responsibilities. Since the survival of many community banks is closely intertwined with the success and viability of their communities, the increase will merely eliminate some of the most burdensome requirements.

In summary, I urge the agencies to seriously consider raising the size of banks eligible for the streamlined examination to $2 billion or, at least, $1 billion in assets to better reflect the current demographics of the banking industry.

Sincerely

C. Scott Greer
CFO & COO

Last Updated 04/14/2004 regs@fdic.gov

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