Federal Deposit
Insurance Corporation

September 24, 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 Executive Vice President and CFO of Bank of Nevada, located in Las Vegas, Nevada. Our bank assets are $224 million and we will soon be; subject to the large bank CRA exam. I 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 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 our bank would still have to help meet the credit needs of the entire community and be evaluated by our regulator.

I also support the addition of 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 new CD criterion to community banks greater than $500 million up to $1 billion. Banks under $500 million now hold about the same percent of overall industry assets as community banks under $250 million did a decade ago when the revised CRA regulations were adopted, so this adjustment in the CRA threshold is appropriate. As FDIC examiners know, it has proven extremely difficult for small banks, particularly 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. That was certainly not the intent of Congress when it enacted CRA.

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 usually without addition of staff. If the FDIC adopts its proposal, a state non-member 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 and does not force the small bank to drain resources to attempt to comply as a large bank is expected to.

I do, however, 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.

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.

Thank you for your time. If you have any questions of me, please feel free to contact me directly at (702) 939-5700.

Sincerely,
Patricia Kirkwood
Executive Vice President
Chief Financial Officer