From: Larry Wilson [mailto:LWilson@firstarkansasbank.com]
Sent: Monday, September 20, 2004 8:54 AM
To: Comments
Cc: psmith@aba.com
Subject: CRA Proposal
Dear Sirs:
I strongly support the FDIC’s proposal to increase the asset
size limit of banks eligible for the streamlined small bank CRA examination
to $1 billion.
As you probably
are aware, the Community Reinvestment Act was put into effect as
a result
of abuses by larger, urban banks that blatantly
avoided lending (and otherwise serving) various areas of their markets.
All banks became ‘guilty’ because of the sins of a few.
The truth is that the vast majority of banks in this country have
more than adequately served the markets in which they are located
and have done so for years without the onus of the CRA.
We (the smaller banks) have served all areas of our market for several
reasons: (1.) It is the right thing to do (2.) The primary way for
our banks to grow is to grow our existing markets (3.) We know our
market and its needs because we live in that market, shop in that
market, go to church in that market, and interact with the people
of that market on a daily basis.
All the CRA has done for our bank is create paperwork that is probably
never seen by anyone. We haven’t changed our lending policies
because we were already serving our market and plan on doing so for
many years to come. Only if the burden of unnecessary regulation
and paperwork becomes too great will we sell our interest in this
bank which has served this market extremely well for the 55 years
of our existence.
We are the only
locally owned bank in this market and we must serve this market
well if
we expect to thrive and prosper. We compete against
branches of Bank of America, US Bank, and three other billion dollar
banks---none of which see our market as anything more than a gnat
on an elephant’s butt. I would venture a bet that no examiner
has ever reviewed the loans of Bank of America to see if they have
ever even made a loan in this market (much less serving all segments
of this market!), yet the examiners spend hours poring over our loan
records to verify that we are, in fact, doing our job of serving
the same market. Also, the state’s largest credit union is
in our market and they have no CRA requirements whatsoever. What’s
fair about that?
The goal of CRA
was to see that all areas and elements of a market are being served.
We
were doing just that for years before CRA was
even a thought in someone’s head. A better approach would be
to periodically look at economic data that is already available to
determine that all areas of a market are being served. If they aren’t,
then review the bank data in that area to determine if one or more
banks are not doing their job of growing their market.
The idea of making
a new “community development” criterion
is overkill and, in the vast majority of markets in which smaller
banks are located, is merely a duplication of what you are asking
us to do to prove that we are serving our market.
The consumer groups that oppose raising the limit on small banks
have no clue as to what is going on in the real world. Our bank,
just like the majority of banks in the country, is seeking to make
every loan we can that doesn’t carry an unreasonable risk.
There is inherently more risk in lending to lower income individuals,
but we do our best to see that we give those individuals every opportunity
to grow and prosper. Don’t make it even harder to lend to these
people by creating even more paperwork for banks to generate that
no one ever sees.
If the FDIC is interest in seeing that the banks that it regulates
remain healthy and are not overburdened by regulation, you will raise
the threshold on streamlined CRA examinations. I will appreciate
your help in this matter.
Larry T. Wilson
Chairman, CEO and President
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