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FDIC Federal Register Citations

Brentwood Bank

411 McMurray Road, Suite 200
Bethel Park, PA 15102-1165
Phone: 412-409-9000
Fax: 412-409-3291

April 6, 2004

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

RE: Proposed rate updating the Community Reinvestment Act (CRA)

Dear Mr. Feldman:

As a community banker, I strongly endorse the federal bank regulators' proposal to increase the asset size of banks eligible for the small bank streamlined CRA examination from $250 million to $500 million. However, I believe the agencies must consider additional relief in this area than has been proposed.

The agencies note that raising the asset limit to $500 million will have little material impact on the amount of total assets currently covered by the large retail institution exam, but will reduce by approximately half the number of institutions subject to such review.

I concur with agencies determination to ensure the vast majority of industry assets remain subject to the large retail exam. However, I would suggest the agencies either index the dollar amount eligible for the small bank streamlined CRA exam or increase the exempt amount from $500 million to $1 billion in assets.

It is my understanding that as of 12/31/03, the number of FDIC insured banks and thrifts were 9,182 representing $9 trillion in assets (FDIC Quarterly Banking Profile 4th Quarter 2003). Of these institutions, 8,088 had totals assets $500 million or less while 8,612 had total assets of $1 billion or less. Further, institutions with $500 million or less in assets account for $1.03 trillion in assets, or 11 percent of total industry assets. The data also showed that institutions with $1 billion or less in assets account for $1.38 trillion in assets or 15 percent of total industry assets.

By either tying the amount eligible for streamlined exams to some type of index or increasing the asset threshold for the large retail institution exam to $1 billion would not have a significant impact on the total amount of assets nor the total number of institutions covered by the exam. It would free up resource dedicated to documenting large bank CRA requirements and allow more community banks to focus on what they do best — fueling America's local economies.

In summary, I believe that increasing the asset-size of banks eligible for the small bank streamlined CRA examination process is an important first step to reducing regulatory burden. 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. While community banks still must comply with the general requirements of CRA, this change will eliminate some for the most problematic and burdensome elements of the current CRA regulation from community banks.

Sincerely,

Thomas Bailey
President & CEO
 

Last Updated 04/27/2004 regs@fdic.gov

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