Federal Deposit
Insurance Corporation

September 20th

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429

RE: RIN Number 3064-AC50

Dear Mr. Feldman:

On behalf of the members of the Maine Bankers Association, we write in strong support of increasing 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 unnecessary regulatory burden imposed on Maine’s smaller banks, which today are required to meet the exact same standards imposed on the nation’s largest multi-state banks.

Maine Bankers Association represents twenty-two financial services organizations, the majority of which are smaller commercial banks operating in local regions of the state. For many years, it has been clear to these Maine bankers that it makes little sense having a local bank with 5 – 7 branches in several rural Maine counties face the same standards as the nation’s largest banks with assets in the trillions and with branches in nearly all 50 states! Of course, community banks would still be required to help meet the credit needs of their entire communities and would continue to be examined by their regulator as to how they are meeting their local community credit needs.

The Maine Bankers Association supports the addition of a community development criterion to be included in the small bank examination for larger community banks, but we believe that the FDIC should adopt its original $500 million threshold. This new community development criterion should be applied only to banks with assets between $500 million and $1 billion. Community banks up to $500 million in assets now hold about the same percent of overall industry assets as community banks with up to $250 million did a decade ago – so this adjustment is an appropriate adjustment.

We know of local community Maine banks that have difficulties finding appropriate CRA qualified investments in their local rural communities. Many small banks then are forced to make regional or statewide investments that are extremely unlikely to ever benefit their own rural community. We are sure Congress did not intend for this result when it enacted CRA.

Maine Bankers Association opposes making the new community development criterion a separate test from the bank’s overall CRA Evaluation. A new separate test would create an additional community development obligation, a new regulatory burden, thereby defeating the intent of the streamlined small bank examination.

Finally, from a significantly rural state such as Maine, our bankers strongly support the FDIC’s proposal to change the definition of “community development” from only focusing on low and moderate-income area residents, to one 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 projects for areas that are not in the small rural bank’s community or market area.

Our Maine Bankers Association membership includes banks that are more than a century old – banks that have grown over time by serving the needs of their local communities. These banks have survived from the mid 1800s to the 21st Century by knowing the needs of their customers. Our Maine banks over the years only prosper and survive by understanding and meeting these customer needs, whether the customer works in forestry, farming, fishing, or the paper industry. Increasing the threshold from $250 million to $1billion won’t reduce the local bank’s commitment to all members of their community – it wisely will reduce regulatory burden on smaller banks that are in no way competing with or similar to our nation’s largest billion, even trillion dollar financial organizations.

Respectfully,

Joseph J. Pietroski, President