COMMUNITY NATIONAL BANKSeptember 22, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold for
the Small Bank CRA Streamlined Examination
Dear Sir:
I am President and CEO of Community National Bank, located in Chanute
Kansas, 10,000 in population. My bank is a $419 million bank in 16 small
towns in Southeast Kansas and we are subject to the full CRA regulation.
I am writing to 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 many small banks such
as my own under the current regulation, which are required to meet the
standards imposed on the nation's largest $1 trillion banks. I
understand that this is not an exemption from CRA and that my bank would
still have to help meet the credit needs of its entire community and be
evaluated by my regulator. However, I believe that this would lower my
current regulatory burden, which is huge.
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. If the FDIC adopts its proposal, a state
nonmember bank would move from the small bank examination to an expanded
but still streamlined small bank examination, with the flexibility to
mix Community Development loans, services and investments to meet the
new CD criterion. This would be far more appropriate to the size of the
bank, and far better than subjecting the community bank to the same
large bank examination that applies to $1 trillion banks. This more
graduated transition to the large bank examination is a significant
improvement over the current regulation.
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. I will
be happy to discuss these issues further with you, if that would be
helpful.
Sincerely,
Daniel L. Mildfelt President and CEO
Community National Bank
14 N. Lincoln
Chanute, KS 66720
