CAIRO BANKING COMPANY
From: Smith, Edgar [mailto:Edgar.Smith@abcbancorp.com]
Sent: Friday, September 17, 2004 3:27 PM
To: Comments
Subject: RIN No. 3064-AC50
I am President of an $80 million dollar bank located in Cairo,
Georgia, a city of 9,500 people located in a county of 20,000
population. We are located in ruarl southwest Georgia. We are in an
agricultural area and many in our population live below the poverty
level. I am writing to strongly support the FDIC's proposal to raise the
threshold for the streamlined samll bank CRA examination to $1 billion
without regard to the size of the bank's holding company.
I support the addition of a community development criterion to the small
bank examination for larger community banks. It appears to be a
significant improvement over the investment test. However, I urge the
FDIC to adopt its original $500 million threshold for small banks
without a CD criterion and only apply the CD criterion to community
banks greater than $500 million up to $1 billion. We have not been able
to find qualified CRA investments in our area.
An additional reason to support the FDIC's CD criterion is that it
significantly reduces the current regulation's "cliff effect". Today,
when a small bank goes over $250 million, it must completely reorganize
its CRA program and begin a massive new reporting, monitoring and
investment program.
I strongly oppose making the CD criterion a separate test from the
bank's overall CRA evaluation. For a community bank, CD lending is not
significantly different from the provision of credit to the entire
community. The current small bank test considers the institution's
overall lending in its community. The addition of a category of CD
lending (and services to aid lending and investments as a substitute for
lending) fits well within the concept of serving the whole community. A
separate test would create an additional CD obligation and regulatory
burden that would erode the benefit of the streamlined exam.
I 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. I think that this change in
the definition will go a long way towards eliminating the current
distrotions in the regulation. We caution the FDIC to provide a
definition of "rural" that will not be subject to misure to favor just
affluent residents of rural areas.
In conclusion, i believe that the FDIC has proposed a major
improvement in the CRA regulations, one that much more closely aligns
the regulations with the Community Reinvestment Act itself, and I urge
the FDIC to adopt its proposal, with the recommendations above.
Sincerely,
Edgar B. Smith, III
President
Cairo Banking Company
201 South Broad Street
P. O. Box 240
Cairo, Georgia 39828
(229) 377-1110 Ext. 200
(229) 377-3993 Fax
edgar.smith@abcbancorp.com
