FARMERS STATE BANK

Subject: Proposed Amendments to the Community Reinvestment Act Regulations

First of all, I applaud the efforts by our Regulators to propose changes to the Community Reinvestment Act (CRA) regulations that would reduce the paperwork burden associated with financial institution compliance, especially compliance by small banks. We thank you for the opportunity to express our opinion on these proposals.

I strongly encourage changing the definition of "small institution" to mean an institution with total assets of less than $500 million, without regard to holding company assets. Our bank is $350 million, and as the bank's CRA compliance officer, I can personally vouch the fact that the CRA compliance paperwork associated with moving from a small bank to a big bank is unduly burdensome. Reporting as a big bank has significantly added to our data collection paperwork efforts without, in my opinion, improving the quality of information our regulators need in order to evaluate our performance.

Additionally, it is not uncommon for banks our size to have compliance assigned to officers who wear many other hats. In my case, I'm responsible for bank operations, security, marketing, branch administration and deposit compliance. Rarely, do banks our size have the luxury enjoyed by the large banks of being able to assign CRA compliance to an entire division of specialized compliance folks.

The focus of CRA evaluations should be on abusive lending practices. And, as is proposed in the recommended amendments to the regulations, it should be made clear to financial institutions that evidence of discriminatory or other illegal credit practices would have a negative impact on CRA evaluations.

Finally, I'm disappointed that the "investment test" was not changed to reflect the fact that banks like ours, who serve small rural communities, have limited community development investment opportunities. This puts small banks at a disadvantage and discourages them from aggressively pursuing "outstanding" performance ratings.

Thanks, again for the opportunity to weigh in on these significant proposals.

Keith Stanton
Senior Vice President & Cashier
Farmers State Bank
220 South Detroit Street
LaGrange, Indiana 46761
888-492-7111
260-463-7341 fax