From: Adrian Smith
Sent: Friday, September 17, 2004 9:28 AM
To: Comments
Subject: RIN No. 3064-AC50
I am writing
to voice my support for the FDIC proposal to raise the
CRA threshold for large banks to $1 billion. Not only would this
be more consistent with the recent OTS amendment, but
it would also relieve banks of significant compliance
burden without compromising the bank's commitment to
the community. I am reminded of a comment made approximately a
year ago by a recently retired FDIC examiner with whom we have
worked. He felt that banks under $1 billion in assets
shouldn't be subject to a CRA examination at all, because
if a bank of that size is not meeting the needs of its
community, it will not survive. A small bank's commitment to its community
is a self-enforcing endeavor that is reflected by the bank's ability to sustain itself.
I also strongly support expanding the current definition of"
community development" to include activities that include rural residents. In fact, that definition should be even more encompassing. Community
development should apply to any activity that promotes or improves the economic
well-being of a bank's assessment area. I think the original intent of the
Community Reinvestment Act is to ensure that banks feel and act upon a sense
of responsibility to improve the communities they serve. While no one segment
should be forgotten, I feel CRA should apply to all of the bank's assessment
areas and not be limited to low- and moderate- income areas and individuals.
The amendment as proposed would give banks more flexibility in meeting their
CRA obligations and would help in reducing their compliance burden, but at
the same time would not exempt the banks from their obligations to meet the
credit needs of their communities. While I personally believe it is unfair
that banking is the only industry in the nation that is obligated to meet
community development standards, I also believe that even without those obligations,
community banks would still be the flagships for community development activities
in their assessment areas.
Sincerely
Adrian Smith
First Security Bank
Batesville, MS
