Citizens Savings Bank
From: Richard L. Riesbeck [mailto:richardr@byesville.net]
Sent: Friday, September 17, 2004 6:10 AM
To: Comments
Subject: CRA Comments
We strongly 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. This would greatly relieve
the
regulatory burden imposed on small banks under the current regulation,
which
are required to meet the standards imposed on the nation’s
largest $1
trillion banks. Community banks would still be required to help meet
the
credit needs of their entire communities and would continue to be
so
evaluated by their regulator.
We support the addition of a community development criterion to
the small
bank examination for larger community banks, but we believe the new
community development (CD) criterion should be applied only to banks
greater
than $500 million up to $1 billion. Community banks up to $500 million
now
hold about the same percent of overall industry assets as community
banks up
to $250 million did a decade ago when the revised CRA regulations
were
adopted, so this adjustment in the CRA threshold is appropriate.
As bankers
and FDIC examiners know, it has proven extremely difficult for small
banks,
especially those in rural areas, to find appropriate CRA qualified
investments in their communities. Many small banks have had to make
regional
or statewide investments that are extremely unlikely to ever benefit
the
banks’ own communities. This result certainly was not intended
by Congress
when it enacted CRA.
We strongly oppose
making the CD criterion a separate test from the bank’s
overall CRA evaluation. Such differentiation creates the impression
that CD
lending is different from the provision of credit to the entire community.
The current small bank test considers the institution’s overall
lending in
its community. A separate test would create an additional CD obligation
and
regulatory burden, eroding the intent of the streamlined exam.
-- We 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. This change will go a long
way
toward eliminating the current distortions in the regulations that
result in
a small rural bank being told to invest in regional affordable housing
bonds
for an urban area not in the bank’s community.
Best regards,
Richard L. Riesbeck
Member, Board of Directors
Citizens Savings Bank
Martins Ferry, Ohio
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